A San Diego whistleblower will receive $17.2 million with the settlement of a 7-year-old false claims lawsuit against Prime Health Care regarding overbilling for Medicare services at 14 California hospitals.
The U.S. Department of Justice announced Friday that it has reached a $65-million settlement with the Ontario-based healthcare system, resolving allegations that Prime “engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare beneficiaries” and that the company “engaged in up-coding by falsifying information concerning patient diagnoses.” Up-coding entails making illnesses seem worse than they really are in order to increase Medicare reimbursement.
The government said the settlement is not an admission of wrongdoing and that claims of up-coding and improper admissions remain “allegations only” with “no determination of liability.”
Prime, which operates a network of 45 hospitals in 14 states and 15 more through its not-for-profit Prime Healthcare Foundation, said it “determined that it was in the best interest of its patients, independent physicians and employees to resolve this matter despite not agreeing that there was any truth to the allegations related to coding.”
The case started in San Diego with whistleblower Karin Berntsen, Alvarado Hospital’s former director of performance improvement. The registered nurse contacted the government in 2011, offering information that eventually turned into a formal complaint unsealed in 2013.
In a statement released by her legal team, Berntsen said she fell ill and underwent several surgeries and hospitalizations during the drawn-out investigation. At one point, the nurse, according to her attorneys, wore a hidden microphone to “secure evidence of Prime founder and CEO Dr. Prem Reddy” and supplied “detailed documents to support her case,” eventually testifying for more than 12 hours at deposition.
Bernsten and her attorneys will be compensated under the False Claims Act, a federal statute that allows private citizens to receive up to 30% of any money recovered by the government as a result of their complaints.