Consumer Fraud

Judge Refuses To Dismiss Whistleblower Suit Accusing MedStar of Medicare Fraud

Pills Stethascope on Money 435x289 Judge Refuses To Dismiss Whistleblower Suit Accusing MedStar of Medicare FraudColumbia, Maryland-based hospital operator Medstar Health Inc. will have to face a False Claims Act lawsuit filed by a whistleblower, alleging it conspired with Accretive Health Inc., a hospital revenue cycle management firm, to falsely bill Medicare for patient treatments.

U.S. District Judge Robert M. Dow Jr., Northern District of Illinois, refused to dismiss the False Claims Act lawsuit brought by former MedStar employee Cherry Graziosi. Ms. Graziosi accuses the hospital system of working with Accretive to alter physician-recommended treatments for Medicare patients with the intent to drive up the number of patient admissions and boost Medicare billings.

“Accretive for a number of years peddled a practice to top hospital administrators at a significant number of hospitals around the country, convincing them that Accretive could provide to the hospitals what they called a ‘revenue lift’ particularly from the Medicare system,” a lawyer representing Ms. Graziosi told Bloomberg BNA.

In this scheme, patients that doctors determined needed only observational stays would be held while MedStar employees faxed medical documentation to Accretive, which would second-guess the physicians’ recommendations and issue a recommendation for inpatient admissions whenever possible.

“This whole enterprise was designed by Accretive to exploit the tension between the hospital administrators and the hospital’s own physicians over money,” Ms. Graziosi’s lawyer told Bloomberg BNA.

“Accretive induced hospital administrators to override both the professional integrity of their hospitals’ own doctors and the fiscal integrity of the Medicare system,” he added.

Judge Dow dismissed Ms. Graziosi’s claims against three other systems that she alleged participated in the same kind of scheme with Accretive, finding that she lacked adequate knowledge of the arrangements to make a case.

Ms. Grazioi’s lawyer, however, said more documentation of those claims will likely turn up in the discovery process and that an amended complaint could be filed in the future naming the other hospital systems.

Source: Bloomberg BNA