Judge de­nies mo­tion to dis­miss Prime whis­tle-blower suit

Modern Healthcare - - REGIONAL NEWS - —Maria Castel­lucci

A fed­eral judge de­nied a mo­tion by Prime Health­care Ser­vices to dis­miss a whis­tle-blower law­suit al­leg­ing the hospi­tal chain fraud­u­lently billed Medi­care.

U.S. Mag­is­trate Judge Pa­trick Walsh ruled that the law­suit, which the U.S. Jus­tice Depart­ment joined in May, con­tains “suf­fi­cient facts” to file suit against Prime un­der the False Claims Act.

The suit claims that in or­der to drive up rev­enue, Prime founder and CEO Dr. Prem Reddy and 14 Prime hos­pi­tals in Cal­i­for­nia pushed doc­tors to ad­mit Medi­care ben­e­fi­cia­ries as in­pa­tients when they should have been out­pa­tients placed on “ob­ser­va­tion” sta­tus. The gov­ern­ment con­tends that more than 35,000 pa­tients were im­prop­erly ad­mit­ted to Prime hos­pi­tals.

Prime re­quested the suit be dis­missed on the grounds that its physi­cians ad­mit pa­tients based on their opin­ion and sci­en­tific judg­ment. Prime also ar­gues the suit wrongly con­cludes that be­cause some Medi­care pa­tients were re­leased shortly after ad­mis­sion they were ad­mit­ted un­nec­es­sar­ily.

Walsh dis­agreed, say­ing Prime’s physi­cians could have been forced to ad­mit Medi­care pa­tients based on poli­cies at hos­pi­tals. In ad­di­tion, the court de­nied re­quests by the Amer­i­can Hospi­tal As­so­ci­a­tion and the Cal­i­for­nia Hospi­tal As­so­ci­a­tion to sub­mit briefs.

“Prime Health­care will con­tinue this case to de­fend the right of pa­tients to re­ceive the qual­ity care they de­serve and is con­fi­dent that the evidence will show that thou­sands of in­de­pen­dent physi­cians pro­vided the care they deemed nec­es­sary for their pa­tients,” said El­iz­a­beth Nick­els, Prime’s vice pres­i­dent of mar­ket­ing.

Dr. Prem Reddy

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