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Johnson Memorial Hospital and Miller’s Health Systems are embroiled in controversy over allegations that they collaborated in an elaborate kickback scheme with healthcare provider Community Health Network (CHN). The alleged illegal business deal is now the subject of a federal lawsuit against CHN.

The lawsuit was filed by whistleblower Thomas Fischer, who is a former chief financial officer at CHN. According to the Daily Journal, the suit contends that CHN was involved in a “sham” deal with Johnson Memorial Health. In the arrangement, Johnson Memorial was paying CHN to monitor and consult on the network’s nursing homes. However, the amount that CHN was paid was far beyond the value of the services it provided, according to the lawsuit filed with the U.S. District Court for the Southern District of Indiana.

Nursing Home Placements Allegedly Involved Illegal Kickbacks

Johnson Memorial owns Miller’s Health Systems, which has 33 nursing homes called Miller’s Merry Manor throughout Indiana. The lawsuit states that Johnson Memorial’s purchase of the nursing home chain in 2011 was accompanied by a deal with CHN to split the excess funding not spent on Miller’s operations annually.

The deal was intended to exploit a law that allows nursing homes owned by county hospitals to receive more Medicare dollars, resulting in more money for Johnson Memorial and CHN, the suit says.

Fischer claims the hospital paid about $6 million a year for CHN’s services, including illegal referrals to its nursing homes. In total, CHN allegedly received about $30 million from Johnson Memorial. The suit does not say how much Johnson Memorial made off the deal.

The lawsuit was filed in 2014. However, it was kept sealed while the U.S. Department of Justice conducted an investigation. Once CHN learned it was named in the lawsuit, the deal was terminated. Johnson Memorial is not a defendant in the suit.

CHN has said the allegations made in the lawsuit “are without merit.”

Need Legal Advice? Contact Baker & Gilchrist

Vulnerable nursing home residents should never be treated as pawns for financial gain. The priority for healthcare providers should always be on patient care, not profits. At Baker & Gilchrist, our medical malpractice attorneys have more than 60 combined years of litigation experience. We fight to protect nursing home residents who have been harmed by medical errors and negligence.

If your loved one was harmed at a Miller’s Merry Manor or any other nursing home throughout Indiana, please contact us to discuss your legal rights. Your initial consultation with Baker & Gilchrist is free. We cover all expenses related to your case and do not receive a fee unless we recover funds for you.

The injury attorneys at Baker & Gilchrist take great pride in helping injured people when their injuries occur due to someone else’s negligent, careless, or reckless actions. With over 60 years of combined litigation experience, we can offer you the knowledge and assistance necessary to help you win the compensation you rightfully deserve for your injuries.