Former HMA CEO Gary Newsome Pays $3.5 Million to Settle Qui Tam Claims by VSG Clients
Washington DC April 30, 2019 – The U.S. Department of Justice announced today that Gary D. Newsome, former CEO of Health Management Associates LLC (HMA), will pay $3.5 million to settle allegations in a qui tam lawsuit that Newsome sought to maximize corporate profits by unlawfully inducing and pressuring Emergency Room (ER) physicians to increase inpatient admissions without regard to whether the admissions were medically necessary. The qui tam action was brought by VSG clients Michael Cowling, a former HMA Division Vice-President who served as CEO at three HMA hospitals and Jacqueline Meyer, a former administrator for EmCare, the nation’s leading provider of emergency room physician services and a major contractor for HMA. Meyer and Cowling will receive approximately $730,000 from the federal and state settlement.
HMA previously paid over $260 million in September 2018 to settle these allegations, while EmCare paid $29.6 million in 2017 to resolve these charges.
The Meyer & Cowling lawsuit was filed under seal on July 15, 2011 in the U.S. District Court in South Carolina by the Washington DC whistleblower law firm Vogel, Slade & Goldstein and the Columbia, S.C., law firm Wyche, P.A. The South Carolina qui tam lawsuit alleged that Newsome ordered hospital administrators to “interrogate” ER physicians about “missed” admissions and that he warned hospital CEOs whose hospitals were below admissions benchmarks that they would be fired unless their admissions rates rose.
The Meyer/Cowling lawsuit was filed under the qui tam provisions of the False Claims Act that authorize individuals with information about fraud against the government to bring a lawsuit on behalf of the government and to share in the government recoveries. Ms. Meyer and Mr. Cowling are represented by Janet Goldstein in the Washington DC law firm Vogel, Slade & Goldstein, LLP, and John Moylan in the Columbia, SC law firm Wyche, P.A.