The U.S. Department of Justice has joined a whistleblower lawsuit against Prime Healthcare Services, adding considerable weight to allegations of widespread Medicare fraud at 14 of the company’s hospitals in California.

Court documents show that a judge granted the agency’s request to join the whistleblower lawsuit on May 24.  

The court’s approval came one day after the government declared in a court filing that its investigation of Prime Healthcare Services has “yielded sufficient evidence” that the targeted facilities “submitted or caused the submission of claims to Medicare for unnecessary inpatient stays.”

U.S. Department of Health and Human Services Office of Inspector General, Christian J. Schrank, released a statement that his office’s investigation into the whistleblower’s allegations prompted the government to step in on the alleged Medicare fraud case against Prime Healthcare.

“Charging for medically unnecessary services, as alleged in this case, raises costs in government health programs and remorselessly passes that bill along to taxpayers,” Schrank stated.

Attorneys who represent the whistleblower, Karin B., shared that the DOJ’s intervention clearly demonstrates the gravity of the claims and the validity of the supporting evidence.

“Our whistleblower Karin B. came forward because she believed these practices could put patients at risk, and she was not willing to allow that to happen,” the plaintiff’s attorney said. “It’s always wrong to game the system to get taxpayers to pay for services that are not needed, especially when it’s not in the best interest of the patient.”

The government also stated that its intervention in the whistleblower lawsuit exemplifies its commitment to bringing those who engage in Medicare or Medicaid fraud to justice.

“The Department of Justice is committed to ensuring that health care providers do not inappropriately seek to profit at the expense of federal health care programs,” Principal Deputy Assistant Attorney General Benjamin C. Mizer said in a statement. “Schemes such as this one can contribute significantly to the rising cost of health care delivery and create needless patient risk.”

Whistleblower Lawsuit Allegations

Prime Healthcare Services finds itself under federal scrutiny because of a whistleblower complaint submitted in October 2011 by Karin B., a registered nurse and director of quality and risk management at Alvarado Hospital Medical Center in San Diego.

Karin’s whistleblower lawsuit accuses Prime Healthcare Services of routinely making Medicare patients’ illnesses seem more severe than they really were in order to justify billing for additional services and increasing hospital admissions.

Karin alleged that this practice occurred not only at Alvarado but also at 13 other Prime Healthcare Services’ properties.

Most of these hospitals are located in Southern California, including Paradise Valley Hospital in National City, Centinela Hospital Medical Center in Inglewood, Encino Hospital Medical Center, Sherman Oaks Hospital and Huntington Beach Hospital.

Karin’s whistleblower lawsuit estimates the total amount of Medicare fraud overbilling at $50 million, a sum that now could result in a sizable financial payoff for her.

Whistleblowers are entitled to 15 percent to 25 percent of the money recovered in a whistleblower lawsuit where the Department of Justice is involved.

Prime Healthcare Services continues to contest the whistleblower lawsuit against it, denying Karin’s allegations as “speculative nonsense” after her whistleblower lawsuit was unsealed in 2013.

The company maintains that it has a consistent track record of meeting Medicare’s billing requirements.

Do You Have a Whistleblower Claim?

If you have information that your employer is committing fraud against the government by violating laws or regulations, or if your employer is causing danger to public health and safety, you may feel obligated to report this information. If you do so, then you may be considered a whistleblower.

People with first-hand knowledge who report Medicare or Medicaid fraud or corruption in government contracts or purchasing activities may be entitled to a portion of any money recovered in a whistleblower lawsuit.

If you believe you have witnessed fraud committed against the government, contact a whistleblower attorney today for a free, confidential consultation.

The Prime Healthcare Services Whistleblower Lawsuit is Case No. 2:11-cv-08214, in the U.S. District Court for the Central Division of California.