U.S. Intervenes in False Claims Suit Against Prime Healthcare Services

Posted: 06/02/2016  browse the blog archive
U.S. Intervenes in False Claims Suit Against Prime Healthcare Services

The federal government has intervened in a lawsuit against Prime Healthcare Services Inc. and its founder and CEO, Dr. Prem Reddy, alleging that Prime knowingly submitted or caused the submission of false claims to Medicare by improperly admitting patients, the U.S. Department of Justice announced last week.

The lawsuit alleges that Dr. Reddy directed the corporate practice of pressuring Prime’s Emergency Department physicians and hospital administrators to raise inpatient admission rates, regardless of whether it was medically necessary to admit the patients.  The lawsuit alleges that Prime’s corporate officers, at Reddy’s direction, exerted immense pressure on doctors in the Emergency Departments to admit patients who could have been placed in observation, treated as outpatients or discharged.  As a result of these medically unnecessary admissions from the Emergency Departments, Prime hospitals allegedly submitted false claims to federal health care programs, such as Medicare.

The lawsuit, United States ex rel. Berntsen v. Prime Healthcare Services, et al., CV11-8214-PJW (MG), was filed in the U.S. District Court in Los Angeles by relator Karin Bernsten, who worked at one of the Prime hospitals where the allegedly improper inpatient admissions allegedly took place.  The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery.  The False Claims Act permits the government to intervene in such a lawsuit, as it has done in a portion of this case.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.