Federal Government Joins Prime Healthcare Whistleblower Suit

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Prime Healthcare Whistleblower Karin Berntsen

The federal government is joining the whistleblower case of James Hoyer client Karin Berntsen against Prime Healthcare Services, its founder Dr. Prem Reddy, and more than a dozen of its hospitals.  Prime is a fast growing company that owns more than 40 hospitals nationwide.

The whistleblower suit, which was unsealed in December of 2013, alleges Prime improperly admitted patients through its emergency rooms to increase payments from Medicare.

James Hoyer partner Elaine Stromgren called the government’s intervention “a significant development which shows the seriousness of the allegations and the strength of the evidence supporting those claims.”

The Department of Justice news release explains some of the key allegations:

The lawsuit alleges that Dr. Reddy directed the corporate practice of pressuring Prime’s Emergency Department physicians and hospital administrators to raise inpatient admission rates, regardless of whether it was medically necessary to admit the patients.  The lawsuit alleges that Prime’s corporate officers, at Reddy’s direction, exerted immense pressure on doctors in the Emergency Departments to admit patients who could have been placed in observation, treated as outpatients or discharged.  As a result of these medically unnecessary admissions from the Emergency Departments, Prime hospitals allegedly submitted false claims to federal health care programs, such as Medicare.

Whistleblower Karin Berntsen remains in her position at Alvarado Hospital in San Diego as Director of Performance Improvement.  She came forward to expose these practices because she believes they put  patients at risk in order to increase profit.

DOJ says the government’s intervention in this case shows its emphasis on combating health care fraud:

“The Department of Justice is committed to ensuring that health care providers do not inappropriately seek to profit at the expense of federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Schemes such as this one can contribute significantly to the rising cost of health care delivery and create needless patient risk.”

“Fraudulent billing practices, such as those alleged in this civil lawsuit, harm taxpayers who fund health care programs, such as Medicare,” said U.S. Attorney Eileen M. Decker for the Central District of California.  “The Justice Department works collaboratively with law enforcement agencies, regulators and, in some cases, private citizens to ensure the integrity of a system that provides healthcare to millions of Americans.”

“Charging for medically unnecessary services, as alleged in this case, raises costs in government health programs and remorselessly passes that bill along to taxpayers,” said Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “Our investigation into the allegations in this case, along with our law enforcement partners, led to the government’s decision to intervene.”

Contact Us ButtonThe whistleblower suit also alleges that Prime would “upcode” patient diagnoses to make them appear more serious, in order to get additional Medicare payments.  The James Hoyer firm will continue to vigorously pursue this count as well.

Multiple news outlets reported on the significant development, including the Center for Investigative Reporting, Wall Street Journal, Los Angeles Times, San Diego Union TribuneModern Healthcare, and Becker’s Hospital Review, among others.