A company accused of making false claims to Medicare recently settled the case for $65 million. Prime Health Care Services and the CEO of the company was accused of making false claims to Medicare and defrauding U.S. taxpayers.

Prime Health Care Management, Prime Health Care Foundation Inc., and Prime Health Care Services Inc. were involved in the false claims to Medicare allegations, including claims that 14 different Prime hospitals throughout California knowingly submitted inaccurate Medicare claims. The U.S. Department of Justice announced the whistleblower settlement in a press release.

The false claims to Medicare allegations included that only patients who required less costly outpatient care were admitted to the hospital. The defendants allegedly billed for more expensive diagnoses and tests for the patients than the patients truly had. This is a fraudulent practice known as upcoding.

The DOJ recently announced the conclusion of the false claims to Medicare case through a settlement agreement, making Prime responsible for $61,750,000 and the CEO of the company responsible for $2,350,000.

False Claims

False claims made to Medicare drain government resources intended to help people with general healthcare needs. Many cases of false and fraudulent Medicare billing are brought to light by whistleblowers – people who have inside knowledge about a scheme to defraud the government through existing healthcare programs.

Those whistleblowers can receive a portion of successfully recovered funds if they initiate their allegations under the False Claims Act. Individuals who report fraud also receive protection from retaliation.

According to the Acting Assistant Attorney General of the Justice Department’s Civil Division, false claims to Medicare defraud the U.S. taxpayers of valuable money that is intended for appropriate health care. Charging the government for inpatient services that a patient does not need and giving patients diagnoses simply because those conditions pay more than what the patient truly suffers from wastes the country’s health care resources.

Prime Health and the FCA

Prime Health Care Services and related companies are one of the biggest hospital systems across the country with more than 45 acute care hospitals located in 14 different states.

As outlined in the false claims to Medicare allegations, between 2006 and 2013, Prime engaged in a regular scheme driven at the corporate level to increase the inpatient admissions for Medicare beneficiaries who initially showed up at the emergency departments of Prime Health Care hospitals in California.

The government alleged in the false claims to Medicare case that the inpatient admission of those beneficiaries was not medically required because their treatment needs and symptoms could have been managed in a less costly observation or outpatient setting.

Hospitals usually receive higher payments from Medicare for an inpatient admission when compared with general outpatient treatment.

The DOJ alleged that, between 2006 and 2014, false claims to Medicare were made via upcoding.  Upcoding practices were allegedly established and encouraged by the Prime Companies. By falsifying information about complications and patient diagnoses, Prime Health enhanced their individual Medicare reimbursement, the DOJ claimed.

Anyone who may have information about false claims to Medicare should consider the option to consult directly with an experienced attorney about filing a claim under the False Claims Act.