- The American Hospital Association filed an amicus brief in federal court alleging the Justice Department’s $50 million false claims suit against Prime Healthcare erodes physician judgment, Modern Healthcare reports.
- Inpatient stays have dropped against a significant rise in observations, and the government and whistleblower scrutiny of physicians’ judgment is in part to blame for that change, according to the AHA.
- The DOJ claims Prime pushed doctors to admit Medicare patients for short hospital stays instead of cost outpatient observation care.
Without commenting on the specific charges against Prime, the AHA said the increase in False Claims Act lawsuit could undermine physicians’ role in patient care decisions. “The chilling effect that results from second guessing these decisions in the absence of an articulated standard for observation status had had a clear impact on the way Medicare patients receive care in America’s hospitals,” the AHA said.
The association cites a MedPac study that found observation stays grew by 88% between 2006 and 2012. Not only are some Medicare beneficiaries being treated inappropriately in outpatient settings, but they may end up paying more as outpatients.
A class action lawsuit in Connecticut federal court accuses the U.S. government of cheating beneficiaries out of Part A benefits by promoting observation over inpatient stays, the AHA said.
In June, DOJ announced that the Medicare Fraud Strike Force was pursuing charges against 301 defendants in 37 federal judicial districts nationwide for alleged involvement in Medicare fraud. The cases totaled $900 million in false billings.
And just this week, Life Care Centers of America agreed to pay $145 million to settle allegations the company submitted false claims to Medicare and TRICARE for unnecessary rehabilitation therapy services — the largest ever with a skilled nursing facility chain.
Separately, Prime said it would appeal a National Labor Relations Board decision requiring it to pay $6.5 million in back wages to 500 employees at Encino Medical Center and Garden Grove Medical Center, Healthcare Finance News reports. The NLRB maintains that the payout is for annual raises stipulated in an expired 2011 contract.