The U.S. Justice Department joined whistle-blower Karin Berntsen’s lawsuit against Prime Healthcare Services. PHS is charged with fraudulent billing practices in order to receive higher reimbursements from Medicare patients. As a nurse and executive at Prime’s Alvarado Hospital Medical Center, Karin Berntsen saw PHS keep Medicare beneficiaries as inpatients when they should have been treated as outpatients. Inpatient treatment can be as much as three or four times the cost of observation or outpatient care.
PHS operates forty-three acute care hospitals under the direction of Dr. Prem Reddy. The DOJ lawsuit alleges that Dr. Reddy and his PHS directors pressured ER doctors to admit patients who would have normally been discharged or considered outpatients.
In United States Intervenes in False Claims Act Lawsuit Against Prime Healthcare Services Inc. and its CEO Alleging Unnecessary Inpatient Admissions from Emergency Rooms, the DOJ states:
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….
The lawsuit, United States ex rel. Berntsen v. Prime Healthcare Services, et al., CV11-8214-PJW (MG), was filed in the U.S. District Court in Los Angeles by Karin Bernsten, who worked at one of the Prime hospitals where the allegedly improper inpatient admissions allegedly took place. The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in a portion of this case.
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