A hospital system on the West Coast has agreed to settle a False Claims Act lawsuit that alleged the healthcare company drove up its profits by admitting patients without medical necessity. The Department of Justice says the Prime Healthcare, some affiliated entities and the founder of the healthcare system have agreed to pay $65 million to settle the whistleblower lawsuit. A former Director of Performance Improvement at one of the hospitals in the system brought the original lawsuit on behalf of the government. She is expected to receive $17,225,000 million for bringing forth evidence and filing the initial claim.
Unnecessary admissions and upcoding underlie the claims
At the heart of the allegations, the DOJ says the hospital system admitted patients who only needed outpatient care and then knowingly billed Medicare for the more expensive inpatient procedures and treatment. There was no medical necessity to admit patients for their conditions. The lawsuit claims the hospital chain proactively admitted patients between 2006 and 2013 to drive its own revenues, at the expense of government healthcare programs.
The government says that the hospital system also engaged in upcoding from 2006 through 2014 to boost profits. The hospitals repeatedly falsified medical records to seek reimbursement from Medicare for more expensive medical protocols than were necessary.
The hospital system reportedly operates 45 hospital facilities in 14 states. Prime Healthcare Services, Inc., and its affiliates do not admit wrongdoing in agreeing to settle the claims, according to the DOJ.
Whistleblowers help the government recover taxpayer money
The government does not have the resources to find evidence of many cases of healthcare fraud. The FCA allows private individuals to bring forward evidence and file a lawsuit on behalf of the government when fraud is occurring related to a government contract. Whistleblowers who initiate these claims are entitled to receive a percentage of any recovery made through verdict or settlement. Whistleblower cases protect taxpayers, as the government is able to recover taxpayer money that has been unlawfully obtained through fraudulent practices.