Healthcare Service Provider to Pay $60 Million to Settle Medicare and Medicaid False Claims Act Allegations

TeamHealth Holdings, a major U.S. hospital service provider and successor in interest to IPC Healthcare Inc., (IPC), has agreed to pay $60 million to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”).

The government alleged that IPC knowingly and systematically encouraged its employees to submit false billings. Specifically, the government alleged that IPC encouraged employees (“hospitalists”) to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on employees with lower billing levels to “catch up” to their peers.

“When health care companies boost their profits by misrepresenting the services they bill to taxpayer-funded health care programs, our office will make sure they are held accountable for their deceptive schemes and that they make changes to bill these programs appropriately,” said Special Agent in Charge Lamont Pugh of HHS-OIG.

Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist filed this lawsuit in a federal court in Chicago, Illinois, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Dr. Oughatiyan will receive a whistleblower reward of approximately $11.4 million.

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