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Select Medical denies whistleblower allegations

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Cumberland County-based hospital operator Select Medical Holdings Corp. has issued a denial of the allegations made in a whistleblower lawsuit focusing on its long-term acute care hospital in Evansville, Ind.

Michael E. Tarvin, executive vice president and general counsel at Select, said the company "intends to continue to vigorously defend against the lawsuit." Select's practices are lawful and ethical, he said, and Select did not direct inappropriate activity.

The lawsuit accuses Select, the hospital and two physicians of "a pattern and practice of fraudulent abuse of the Medicare and Medicaid programs by defendants resulting in the submission of false or fraudulent claims to the federal health care programs and most especially Medicare."

Tarvin said Select compared the hospital to all U.S. long-term acute care hospitals using Medicare’s published data and also engaged an independent physician expert to review medical records there.

"Based on the information obtained, Select has determined that there was no manipulation of discharge timing or the timing of readmissions, no inappropriate admissions scheme, no systematic upcoding and no unnecessary bronchoscopies," Tarvin said.

He noted that in early January 2012, Select informed the former CEO of the hospital, who had been in charge of the facility for 13 years, that she would be replaced. She went to the Indiana Attorney General with her complaints in March 2012 "in reaction to this news," he said.

The lawsuit was filed under the qui tam provisions of the federal False Claims Act, which allows private parties to file the suits in hopes that after investigation the government will decide to participate. If successful, the suits can involve significant monetary damages and penalties and award bounties to those private plaintiffs.

State and federal agencies have not yet decided whether to join the case; the court has granted repeated stays while investigation continues.

Tarvin also said the physicians named in the lawsuit "are not employed or otherwise directed by Select."

Select trades shares on the New York Stock Exchange under the ticker symbol SEM.

Heather Stauffer

Heather Stauffer

Heather Stauffer covers Lancaster County, nonprofits, education and health care. Have a tip or question for her? Email her at heathers@cpbj.com. Follow her on Twitter, @StaufferCPBJ.

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