False Claims Case Against Adventist Health System Clears Major Hurdle

The whistle-blower case against Adventist Health System/Sunbelt, Inc. got the go ahead to move forward on claims that the hospital owner fraudulently over-billed Medicare, Medicaid and Tricare for emergency department services.  A federal judge in Florida refused to toss out claims by two former employees, denying the company’s Motion to Dismiss.

The James Hoyer Law Firm serves as co-counsel in the case representing the whistle-blowers along with lead attorney Marlan Wilbanks.

Law360’s Daniel Wilson reports on the decision in this article:  “Adventist Health Can’t Dodge FCA Claim of ER Overbilling.”

Law360, New York (February 20, 2013, 12:17 PM ET) — A Florida federal judge on Tuesday refused  to toss two former workers’ claim that hospital owner Adventist Health System/Sunbelt Inc. had  fraudulently overbilled Medicare, Medicaid and Tricare for emergency department services, ruling  the plaintiffs had adequately backed the claim.

According to U.S. District Judge John Antoon II, relator Amanda Dittmann — a former bill-coding  and reimbursement compliance officer at the company — was in a position to have personally observed AHS’ allegedly unlawful emergency billing practices, meaning the relators had shown the necessary firsthand knowledge of the company’s claimed wrongdoing.

“The relators’ allegations ‘provide the indicia of reliability that is necessary in a complaint alleging a fraudulent billing scheme,’” Judge Antoon said.

The order marks Judge Antoon’s second refusal to toss claims from the False Claims Act suit, following his July order on two other overbilling claims, which also found that the relators — Dittman and doctor Charlotte Elenberger — had adequately based those claims on personal knowledge of AHS’ alleged overbilling. The relators added their emergency department overbilling claim in an October amended complaint.

Marlan Wilbanks, counsel for the relators, said Thursday that the ruling was “very important,” backing — along with Judge Antoon’s previous order — their allegations of a lack of institutional control at AHS.

“The consistent theme [behind the orders] was that when it came to government billing, they were asleep at the switch,” Wilbanks said. “We’ll be showing that there’s not hundreds, but thousands of  false claims.”

Counsel for AHS did not immediately respond to a request for comment.

The suit, first brought in July 2010 by Dittmann and Elenberger, who formerly had staff privileges at AHS’ Orlando, Fla.-based Florida Hospital, accuses the Altamonte Springs, Fla.-based nonprofit health care organization of improperly overcharging Medicare, Medicaid and Tricare for services at the hospital. The case was unsealed in October 2011 after the U.S. declined to intervene.

AHS had routinely misused billing code modifiers to unbundle payments for bundled medical services, charging the government more than the bundled price, according to the complaint.

The health care group had also misused a pricing code for the drug octreotide, charging for a more expensive, higher dosage strength version than actually used, resulting in several hundred thousand dollars in government overcharges between August 2007 and July 2008 alone, the relators allege. While the company had discovered these overcharges through an internal audit, it had made no attempt to reimburse the government or extend the audit, the relators claim.

AHS had also routinely billed the federal government for computer-aided detection software analysis of mammograms, even when no such analysis was done, the complaint said. When a third-party radiology laboratory learned it had received improper reimbursement for CAD analysis supposedly performed on behalf of AHS, it promptly refunded insurers and the government, but AHS refused to reimburse the government for fear a refund would trigger an audit, according to the relators.

The relators are represented by Elaine Stromgren, Christopher C. Casper and John Newcomer of James Hoyer Newcomer & Smiljanich PA; Marlan B. Wilbanks and Ty M. Bridges of Wilbanks & Bridges LLP; Matthew P. McLauchlin of Volpe Bajalia Wickes Rogerson & Wachs PA; and L. Lin Wood, Amy M. Stewart and Katherine V. Hernacki of Wood Hernacki and Evans LLC.