Prime Healthcare hit with whistleblower suit

A former executive with for-profit hospital chain Prime Healthcare Services has filed a federal whistleblower suit against the California-based company, claiming some of its facilities consistently overcharged the Medicare program.

Karin Berntsen, a former Prime risk manager at Alvarado Hospital in San Diego  filed the suit, according to Law360. One of the lawsuit's allegations is that Prime ran up charges by eliminating observation care and refusing to discharge patients to post-acute facilities.

"Relator [Berntsen] estimates that PHS Alvarado's fraudulent short-stay inpatient admission billings to government healthcare programs exceeds $4 million," the complaint said, according to Law360. "Considering Alvarado is a typical hospital within the (Prime) system, the probability that all other (Prime) facilities are falsely billing Medicare in the same manner as Alvarado, and that some of those hospitals have been within the (Prime) system for at least six years, relator conservatively estimates that Prime's false billings just with regard to improper short-stay inpatient admissions alone exceed $50 million."

"It defies common sense that Alvarado Hospital has been engaged in a false claims scheme when the entire Prime Healthcare system has been under this type of heightened and aggressive regulatory scrutiny for years," Troy Schell, Prime's general counsel, told the San Diego Union-Tribune.

In 2011, FierceHealthcare reported that Prime hospitals in California systematically billed Medicare for rare medical conditions at frequencies far higher than is commonplace for other hospitals in the U.S., prompting a federal investigation. Alvarado Hospital was among the facilities named for such a practice. More recently, California regulators fined Prime $95,000 when executives shared the medical records of a patient who had complained about her hospital stay to the Los Angeles Times.

Berntsen's suit, which was filed in 2011, was ordered unsealed because the time limit for keeping such suits under seal had expired. The federal government has not joined the suit, but Law360 said it is continuing its investigation of the matter.

To learn more:
- read the article in Law360 (subscription required)
- here's the San Diego Union-Tribune article