A federal judge in Illinois is dismissing some defendants in a Medicare FCA lawsuit, but isn’t letting one off the hook for possible Medicare fraud.

Whistleblower Cherry G. worked for MedStar Health Inc., a not-for-profit healthcare organization which operates, among other entities, 10 hospitals in the Baltimore/DC area.

Medstar Health Inc., Cherry knew, had a relationship with a medical billing service, Accretive.

Cherry says she noticed that sometimes when MedStar would see a patient, the patient might be classified as observation-only and not be admitted to the hospital, Accretive, their billing service, would reclassify the same patient as admissible as an inpatient, thereby charging more money to Medicare.

MedStar, she claims, participated in this scheme by asking for a “second opinion” for many Medicare and Medicaid patients. By reclassifying the patients as needing more services than they actually did, both MedStar and Accretive, she claims, defrauded the federal government.

Cherry claims that when Accretive reviewed the cases and recommended the patients be admitted as inpatient, they often overrode the judgment of doctors and allowed the hospitals to submit inflated bills.

MedStar denies these claims and says there no basis for what Cherry is alleging.

However, according to Law360, the judge noted that “[Cherry] alleges, for example, that one patient was examined by a [Washington, D.C.] emergency room physician for complaints of lower back pain and resulting inability to walk.”

“The physician found that the patient’s condition did not medically justify a full hospital admission and prescribed an initial observation of her condition. Accretive changed the patient’s diagnosis, representing that ‘[d]ue to inability to ambulate patient is at immediate risk for traumatic fall injuries, increased morbidity and mortality,’” the judge said.

According to this Medicare FCA lawsuit, Cherry claims that these violations occurred between 2012 and 2013 while she worked as a service associate with MedStar’s emergency department.

In her Medicare FCA lawsuit, she cited False Claims Act violations not only by Medstar, but by other healthcare organizations including Methodist Healthcare System and Southeast Health System. Cherry claimed that these healthcare organizations had the same relationship with Accretive that MedStar did.

These other defendants were dismissed from the Medicare FCA lawsuit by the Illinois federal court judge because there was no evidence for such claims.

However, she was able to provide documentation and evidence for at least nine counts of False Claims Act violations perpetrated by Accretive and MedStar.

Even though other healthcare organizations were dismissed for lack of evidence, attorneys are confident that discovery will reveal similar agreements between Accretive and other hospitals.