Feds join False Claims Act suit against hospital chain

Nursing home broke federal labor law by posting memo urging staff unity, NLRB finds
Nursing home broke federal labor law by posting memo urging staff unity, NLRB finds

The U.S. Justice Department joined a False Claims Act lawsuit on Thursday that alleges a California-based hospital chain submitted more than $50 million in false Medicare claims and improperly admitted beneficiaries.

The case against Ontario, CA-based Prime Healthcare Services was brought in 2011 by whistleblower Karin Berntsen, a registered nurse and director of quality and risk management at one of the company's hospitals.

Berntsen claims Prime routinely pressured staff at 14 of its hospitals to raise inpatient admission rates, even if a patient's condition was not severe enough to warrant admission.  Likely caught in the web were skilled nursing residents.  The admissions resulted in Prime submitting $50 million in false Medicare claims for medically unnecessary services, Berntsen's suit alleges.

The suit also names Prime's founder and chief executive officer Prem Reddy, M.D., who allegedly requested that emergency department staff be terminated “if he decided they were passing up opportunities to cause the admission of Medicare beneficiaries,” according to a DOJ court filing. The filing also accuses Reddy of increasing the work schedules of physicians with high rates of admission, and telling others “to find a way to admit all patients over 65 because they all have insurance,” the Los Angeles Times reported.

Prime originally called Berntsen's accusations “speculative nonsense” when the case was unsealed in 2013. Following the government's intervention, the company changed its tune to point out the “lack of clarity between what federal regulators and physicians believe is necessary to adequately document medical necessity for hospital admissions.”

“Over 600 medical records that were appealed to the Administrative Law Judges and Medicare Appeals Council, all had rulings in Prime Healthcare's favor, with no exception,” a statement from the company said. “Given this precedence of successful appeals on thousands of claims, Prime Healthcare is confident it will prevail and ultimately be exonerated.”