Blog Exclusive: Government Sues Hospital for Birthing Mama’s Babies

by BakerHostetler

The Clinica de la Mama case could well serve as an instruction manual of what not to do to stay out of the government’s crosshairs. In this case, several hospitals entered into contracts for Clinica de la Mama to provide “services” including translation, translation management, consulting, eligibility determination, marketing, birth certificate, educational, community outreach and others. On their face, the contracts looked legitimate and the services should have been permissible. Indeed, language in these agreements stated that the agreement contained the entire understanding of the parties with respect to the subject matter thereof and, in several agreements, the parties acknowledge that none of the benefits granted Clinica de la Mama are conditioned on any requirement that Clinica de la Mama or any Clinica staff make referrals to, be in a position to make or influence referrals to, or otherwise generate business for the hospitals or their affiliates. For good measure, some of the agreements also stated that “the parties certify that they shall not violate the Anti-Kickback statute.” So what went awry? While it may not have been a dark and stormy night when the contracts were entered into—the circumstances have the earmarks of a Medicare fraud thriller.

According to the complaint of the state of Georgia and the federal criminal information against a hospital CEO and Clinica de la Mama owner, when the contracts were being negotiated by Health Management Associates (HMA), the services described in the agreements were not the primary reason why the hospital entered into the agreement or paid the remuneration. The government contended that the real reason was set forth in an e-mail the hospital administrator sent to corporate which stated the purpose of the Clinica de la Mama agreement was to “grow [the] OB service line volume.” Furthermore, the financial feasibility for the contract laid out the “the explicit reason for the contract: the expectation that payments to Clinica [De La Mama] will result in a significant increase in deliveries... and, in turn, an increase in Medicaid reimbursement.... Interpreter services, a cost center if actually purchased, and eligibility determination services [were] never mentioned in the . . . feasibility analysis. . . . HMA . . . specifically projected reaping a 52.6% return on their $1,878,000 investment.” Both Clinica de la Mama and the hospital closely tracked referrals between themselves. Thus, the government claimed HMA intended to purchase referrals and induce Clinica de la Mama to refer and direct women who were about to be eligible for Emergency Medical Assistance / Medicaid benefits in connection with the births of children. The anti-kickback law has been interpreted to cover any arrangement where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals, even if there were other legitimate purposes.

Worse yet, the service contracts were largely a sham according to the government’s complaint. When a new CFO, the relator in this case, arrived at HMA’s hospital he found the Clinica de la Mama contract in his desk and learned that the contract had not been entered into the hospital’s contract management system. Despite monthly payments of $15,000 to $20,000, the CFO was unable to find anyone who knew of or used Clinica de la Mama’s interpreter services. Indeed, the hospital actually paid another service for translations when the need for an interpreter arose.

To ensure that Clinica de la Mama patients delivered only at hospitals contracted with it, Clinica de la Mama allowed only OBs with delivery privileges at the hospitals to see patients at their clinics. Each Clinica patient also was provided with an identification card at or near her first appointment that identified her assigned OB and hospital.

When the CFO tried to terminate the relationship with Clinica de la Mama, he received a final invoice from Clinica de la Mama charging the hospital for an average of more than 13 hours per day for interpreter services purportedly provided. Despite the extensive services claimed, the CFO could not confirm that Clinica de la Mama employees had even been on-site at the hospital. If a mother asked to use another hospital, Clinica de la Mama staff were instructed to discourage them by indicating that Medicaid might not pay for the services at another hospital.

Not long after, as in all thrillers, there is resolution. The former co-owner of Clinica De La Mama and HMA’s former CEO recently pled guilty to conspiracy to violate the anti-kickback law by paying and receiving illegal remuneration.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:


BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.