Prime Whistleblower Suit Is Unsealed
The director of performance improvement at Alvarado Hospital in San Diego has filed a whistleblower suit against its owner, Prime Healthcare Services, claiming the Ontario-based hospital chain systematically overbilled the Medicare program.
The suit claims Prime violated the federal False Claims Act by disregarding guidelines for keeping patients under observation care, admitting them as inpatients and them not discharging them to post-acute care facilities.
Patients kept under observation are a sore point for hospitals, as they get paid significantly less than if they admitted them as inpatients. But if such patients are admitted and kept for less than two full days, their charges to Medicare are far more likely to draw the attention of Medicare billing auditors.
Karin Berntsen filed the suit in 2011, but it was unsealed last week because the statute for keeping such litigation under wraps had expired.
“Karin became concerned after witnessing numerous instances in which patients were admitted and kept in the hospital unnecessarily,” said Elaine Stromgren, one of Berntsen's attorneys. “This exposed patients to a greater risk of complications, like infections and medical errors.” Stromgren added that the suit was filed after hospital management spurned Berntsen's request to change course.
The suit claims Alvarado overbilled Medicare by at least $4 million. If Prime's other hospitals are taken into account, the overbilling may exceed $50 million, according to the lawsuit. Plaintiffs, or relators as they're known in such actions, are entitled to 15% of any amount recovered.
Prime officials dismissed the suit as “speculative nonsense” noting that they would not engage in such conduct given the level of scrutiny the company has received in California.
In 2011, the California Watch investigative website reported that Prime hospitals in California systematically billed Medicare for rare medical conditions at frequencies far higher than is commonplace for other hospitals in the U.S., prompting a federal investigation. Prime also paid a $95,000 fine for breaching patient privacy when managers of one of its hospitals in Northern California shared with the Los Angeles Times medical records of a patient who complained about her care.
The U.S. Department of Health and Human Services has not yet made a decision to join Berntsen's suit.
