Large Hospitalist Company Charged With Medicare False Billings Scheme

162017_132140396847214_292624_nThe U.S. Attorney’s Office announced on June 17, 2014 that it is intervening in a federal whistleblower lawsuit (qui tam lawsuit) alleging that a large California-based hospitalist company that employs 2,500 hospitalists (physicians who work only in hospitals and other long-term care facilities and who oversee and coordinate inpatient care for patients from admission to discharge) and other health care providers in more than 1,300 facilities in 28 U.S. states, violated the federal False Claims Act by knowingly engaging in systematic overbilling for hospital evaluation and management services billed to Medicare, Medicaid, and other federal health benefit programs.

The federal government alleges that the hospitalist company encouraged its physicians to bill for higher and more expensive levels of medical service than were actually provided, which is known as “upcoding,” and that it pressured physicians with lower billing levels to “catch up” to their peers. The federal government further alleges that the company was aware that its physicians were using the highest-level billing codes at rates that were far in excess of what would normally be expected, and that the company knew or should have known that its physicians could not have been actually performing the services at the levels for which claims were submitted.

As a result of the alleged upcoding scheme, the government alleges that the company’s hospitalists routinely and systematically submitted upcoded claims for payment to the United States, causing Medicare, Medicaid, and other federal health benefit programs to overpay the company by millions of dollars — more than half of the company’s revenues historically have come from government medical insurers, including Medicare, Medicaid, the TRICARE Program, the Federal Employee Health Benefits Program, and the Railroad Retirement Medicare Program.

The original whistleblower lawsuit was filed under seal in 2009 by a hospitalist who formerly worked for the company in Texas between 2003 and 2008. The whistleblower lawsuit (known as a qui tam lawsuit) was filed under the provisions of the federal False Claims Act, which allows private citizens to sue on behalf of the U.S. government for false claims and to share in the amount that the government recovers as a result. The U.S. has a right to intervene in qui tam actions, and did so in this matter on June 16, 2014.

Under the False Claims Act, the government is entitled to recover three times its damages as well as civil penalties that range from $5,500 to $11,000 for each false claim submitted. The U.S. Department of Justice has recovered more than $17 billion through False Claims Act cases since January 2009 (more than $12.2 billion of that amount were recovered in cases involving fraud against federal health care programs).

The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist Company, Inc., et al., No. 09 C 5418 (N.D. Ill.).


If you have knowledge of false billings having been submitted to Medicare or other federal health care programs for payment/reimbursement, you may become a whistleblower and if your whistleblower claim/lawsuit results in a settlement or judgment with the wrongdoer, you may be entitled to share in a portion of the amount recovered.

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This entry was posted on Sunday, June 22nd, 2014 at 9:10 am. Both comments and pings are currently closed.


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