The company that owns Lower Bucks Hospital has been ordered to pay $65 million to settle allegations that 14 medical centers in California knowingly submitted false claims to Medicare.
The U.S. Department of Justice said Prime Healthcare and its CEO Dr. Prem Reddy will have to pay the fine to the federal government. Reddy will shell out $3.25 million of the settlement out of his own pocket.
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A whistleblower who warned federal officials of the practice will receive $17,225,000 as her portion of the settlement.
According to federal officials:
The settlement resolves allegations that from 2006 through 2013, Prime engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare beneficiaries who originally presented to the Emergency Departments at 14 Prime hospitals in California. The government claimed that the inpatient admission of these beneficiaries was not medically necessary because their symptoms and treatment needs should have been managed in a less costly outpatient or observation setting. Hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient treatment; therefore, the admission of beneficiaries who do not need inpatient care, as alleged here, can result in substantial financial harm to the Medicare program. The settlement also resolves allegations that, from 2006 through 2014, Prime engaged in up-coding by falsifying information concerning patient diagnoses, including complications and comorbidities, in order to increase Medicare reimbursement.
The healthcare provider has also entered an agreement with the U.S. Department of Health and Human Services Office of Inspector General to hire an independent review organization to look into the company’s claims for services for Medicare beneficiaries.
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Federal officials said the settlement is not an admission of any wrongdoing by the hospital chain that operates facilities throughout the county, including in Bristol Township. Government officials noted the claims were “allegations only.”
“This settlement reflects our ongoing commitment to ensure that health care providers appropriately bill Medicare,” said Acting Assistant Attorney General Chad A. Readler. “Charging the government for higher cost inpatient services that patients do not need, and for higher-paying diagnoses than the patients have, wastes the country’s valuable health care resources.”
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“There was no finding of improper conduct or wrongdoing of any kind by Prime Healthcare. Prime Healthcare’s exemplary record of clinical quality care was never in question. This matter dealt with the technical classification of the category under which patients were admitted and billed,” California-based Prime Healthcare said in a statement.
“We are very pleased with the ultimate resolution of this lawsuit,” said Joel Richlin, Prime Healthcare deputy general counsel. “Prime Healthcare will always support independent physicians who provide quality, compassionate care while fulfilling our mission to save hospitals, save jobs and save lives.”
