A former Hilton Head Hospital executive pleaded guilty to federal charges Thursday stemming from an alleged scheme to pay kickbacks and increase Medicaid reimbursements.
Gary W. Lang, the hospital's vice president of business development from 2004 to 2006, pleaded guilty to conspiracy to violate an anti-kickback law and will enter into a plea agreement with the U.S. Attorney's Office, court documents said.
The accusations stem from a "whistleblower" civil lawsuit that contends the prenatal clinic, Clinica de la Mama, was paid to refer clients to Hilton Head Hospital and four Georgia hospitals for Medicaid-paid deliveries.
Federal law prohibits hospitals from paying for a referral if the patient's bill will be picked up by a federal health care program, such as Medicaid. Illegal immigrants ordinarily are not eligible for Medicaid coverage, except for medical emergencies, which include child birth.
The suit alleges Tenet Healthcare Corp., which owns Hilton Head Hospital, and Health Management Associates, the Georgia hospital company, entered into agreements with Clinica de la Mama to generate Medicaid revenue from the illegal immigrants that were referred to the hospitals by the clinic for delivery. Hilton Head Hospital also allegedly paid the clinic for these referrals.
When Lang left Hilton Head in 2007 to become CEO at Clearview Regional Medical Center in Monroe, Ga., a position he held until 2010, he duplicated the referral practice there, the lawsuit said.
"These illegal referral arrangements resulted in women being steered to deliver their babies at hospitals on the basis of Clinica's and the hospitals' financial self-interest, regardless of whether it was in the women's best interest," U.S. Attorney Sally Quillian Yates said in a news release.
Lang's charges carry a maximum penalty of five years in prison and a fine of $250,000. His negotiated plea deal will be issued Jan. 15, according to court documents.
Co-conspirator Tracey Cota pleaded guilty to the same charges Wednesday. Cota, who is based in Atlanta, was the chief operations officer of Clinica de la Mama from 2000 to 2010.
Lang has been the CEO of Oasis Health International, a health care management consulting firm on Hilton Head, since March 2011, according to his LinkedIn social media profile. Attempts this week to reach Lang and his attorney, Michael John Trost, were unsuccessful.
Prosecutors were tipped off by the whistleblower, Ralph Williams, who worked for one of the Georgia hospitals. Williams was fired after he expressed concerns to hospital executives about the referrals, according to the lawsuit.
The hospitals have argued they had legitimate business relationships with the prenatal clinics and merely hoped those relationships would generate referrals, according to court documents. They filed a motion to dismiss the suit, which a federal judge denied June 24.
Follow reporter Laura Oberle at twitter.com/IPBG_Laura.