IPC The Hospitalist defrauded Medicare and Medicaid, U.S. lawsuit says

The U.S. Justice Department has accused a North Hollywood healthcare company of defrauding the federal government of millions of dollars by overbilling for services its doctors performed.

In a lawsuit filed Monday in Chicago, federal lawyers said IPC The Hospitalist Co. bilked Medicare and Medicaid by billing for more expensive care than was provided.

The company assigns doctors to hospitals in 28 states, then bills insurers, including government programs, for treatment they provide. The company reported $610 million in revenue last year.


The U.S. attorney’s office for the Northern District of Illinois said it was acting on complaints originally made in a whistle-blower lawsuit by Dr. Bijan Oughatiyan, a former IPC doctor.

In a 2009 lawsuit, Oughatiyan alleged that the company instructed its doctors to upcode, or bill health insurers for a higher level of care than they provided. After its own investigation, federal lawyers decided to pursue the case themselves. Oughatiyan could be entitled to a portion of the money that the government recovers from the company.

IPC said in a statement that it would “work expeditiously toward a resolution with the Department of Justice.”

“The company believes it has a strong compliance focus, and that it operates with appropriate billing policies, procedures, provider training and compliance programs and controls,” IPC said in the statement. “It is not possible to predict when this matter may be resolved or what impact, if any, the outcome of this matter might have on the company’s consolidated financial position.”

The government’s lawsuit seeks unspecified damages, but it could lead to a recovery in the tens of millions of dollars, said Matthew Organ, a Chicago attorney who represents Oughatiyan.

The lawsuit says the company has filed more than 5 million claims with Medicare since 2003 and that the company charged the government insurance program much higher rates than the national average. Hospitalists are doctors who care for patients in hospitals. IPC encourages its doctors to overstate the care they provide by issuing them bonuses based on their billings, the lawsuit said.

“Low-billing hospitalists are pressured to use more complex billing codes that reimburse at higher rates and increase net revenue per patient,” the Justice Department alleged in the lawsuit. “Hospitalists who consistently use more moderate billing codes are pressured by IPC ... management to change that practice.”

IPC, which is publicly traded, was founded in 1995 by Dr. Adam D. Singer, the company’s chief executive and chairman. Shares of IPC fell 3.4% on Tuesday to $38.84. Its stock is down 35% this year.

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