Community Health Network has socked away $75 million in a “potential settlement agreement” with the U.S. Justice Department and a former chief financial officer who filed a whistleblower suit nearly a decade ago.

The Indianapolis-based hospital system disclosed in a financial filing Oct. 26 that it had recorded an additional $50 million in reserves related to the lawsuit, on top of $25 million it had set aside several years ago.

And earlier this week, both sides told a federal magistrate they had reached an agreement in principle to settle much of the case, according to court filings.

If a settlement is reached, it could end a legal saga that has stretched out for more than nine years, involving nearly 700 filings in the federal court docket. A federal judge in 2021 threw out several motions by Community Health to dismiss the case.

Federal authorities say Community Health engaged in a long-running scheme to recruit physicians and pay them huge salaries and bonuses in return for giving referrals to the health system.

The alleged scheme, the government said, was brought to light with the help of Thomas Fischer, who served as Community Health’s chief financial officer from 2005 until he was terminated in 2013.

The Justice Department filed a False Claims Acts against Community Health in 2020, saying it knowingly submitted or caused submissions of false claims to Medicare from 2008 to at least 2017.

Fischer said he was fired in retaliation for repeatedly asking questions about...

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