Dive Brief:
- The U.S. Justice Department recently filed notice in U.S. District Court in Los Angeles that it is partly intervening in a whistle-blower case against Prime Healthcare Services.
- The whistle-blower lawsuit alleges that Prime Healthcare fraudulently billed Medicare for beneficiaries admitted as inpatients instead of treating them as outpatients.
- The company's general counsel, Troy Schell, said he expects Prime will be exonerated.
Dive Insight:
A Prime employee and registered nurse, Karin Berntsen, an executive at one of Prime's 43 hospitals, alleged the company billed Medicare for patients admitted as inpatients when they should have been put on "observation" status as outpatients.
In addition, several employee witnesses told investigators Prime's CEO, Dr. Prem Reddy, would criticize ER physicians who failed to admit Medicare beneficiaries and tell physicians to find reasons to admit all patients over age 65.
Analyses by the government of Medicare claims data showed hospital billings for beneficiaries would "observation" status would drop after Prime acquired a hospital.
The Justice Department said its investigation has provided "sufficient evidence" for its partial involvement in the lawsuit.
The government has recovered $3.3 billion from healthcare fraud judgments and settlements in fraud cases and proceedings, according to CMS.