Whistle-Blower Lawsuit Alleges Medicare Fraud at Prime Healthcare
An employee at Prime Healthcare has filed a $50 million lawsuit against the health system, accusing it of defrauding Medicare at 14 health centers, U-T San Diego reports (Sisson, U-T San Diego, 1/21).
Prime previously has come under scrutiny for allegedly submitting fraudulent bills to Medicare and Medi-Cal, California's Medicaid program.
In 2011, the California Department of Public Health looked into claims that Prime "upcoded" patient bills and referred the matter to CMS officials. In addition, the FBI questioned former Prime staff members about the health system's billing practices (California Healthline, 6/12/13).
Details of the Lawsuit
The suit was filed by Karin Bernsten, director of performance improvement at Alvarado Hospital in San Diego, under a whistle-blower process.
The suit alleges that Prime misrepresented patients' conditions in order to received higher reimbursement payments from CMS. According to the lawsuit, Alvarado received $4 million in excess reimbursement payments from Medicare. The suit assumes that similar practices took place at 14 other Prime hospitals in California (AP/Sacramento Bee, 1/18).
In a statement released last week, Prime called the allegations "speculative nonsense."
Troy Schell, Prime's general counsel, said, "It defies common sense that Alvarado Hospital has been engaged in a false claims scheme when the entire Prime Healthcare system has been under this type of heightened and aggressive regulatory scrutiny for years" (U-T San Diego, 1/21).
Meanwhile, Thom Mrozek, a spokesperson for the U.S. Attorney's Office in Los Angeles, said the court will not yet join the case.
Mrozek said, "Our decision not to intervene at this time should not be construed as a statement about the merits of the case," adding that "the government retains the right to intervene at a later date upon a showing of good cause" (AP/Sacramento Bee, 1/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.