DOJ joins whistleblower suit against national hospitalist company

What makes the suit particularly notable is that it involves alleged upcoding of evaluation and management (E/M) claims, a practice that normally does not generate payment differences large enough to justify the time and effort of Centers for Medicare and Medicaid Services (CMS) conducting audits on such claims.

According to the DOJ and court documents, the government on Monday joined a whistleblower (qui tam) false claims suit against IPC The Hospitalist Company, Inc., that was originally filed in 2009 by Bijan Oughatiyan, M.D., of Dallas. While working as a hospitalist for IPC in San Antonio from 2003 to 2008, Dr. Oughativan became concerned about the pressure he felt from IPC to code all E/M claims at the highest possible level. According to the suit, IPC not only knew about the possible upcoding, it tracked each physician’s claims, provided claims training and encouraged those who were not using the highest possible levels of E/M claim coding to “catch up” to their peers.

The suit alleges that some physicians were billing for more work than could be done in 24 hours even with conservative estimates of how much time the work would take, and one physician billed for E/M services provided to 65 patients in a single day. 

Under the False Claims Act, when the government intervenes and takes over a lawsuit filed under the qui tam statue, as it did in this case, it may recover three times its damages plus civil penalties ranging from $5,500 to $11,000 for each false claim submitted. That per claim amount could prove very costly to IPC if the government wins the case as the number of potential upcoded E/M claims might be enormous given the number of physicians working for the company.

IPC is a public company based in North Hollywood, California, and according to the government, is one of the largest hospitalist companies in the United States. It employs around 2,500 hospitalist physicians and other health care providers in more than 1,300 facilities in 28 states.

In a statement to its investors, IPC noted that it “continues to work expeditiously toward a resolution with the Department of Justice. The company believes it has a strong compliance focus, and that it operates with appropriate billing policies, procedures, provider training, and compliance programs and controls.”

If IPC physicians were upcoding, they likely are not the only ones doing so. Just last month, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) sent a report to CMS noting that an examination of a sample of 2010 E/M claims showed that more than half (55 percent) had coding and/or documentation errors. In addition, when the OIG looked just at physicians it classified as high-coding because their average code level was in the top 1 percent of their specialty and they billed for the two highest level codes for E/M services at least 95 percent of the time, upcoding occurred in 99 percent of miscoded claims for E/M services.

Although Dr. Oughativan worked in Texas and IPC is in California, the case is being handled by the U.S. Attorney’s Office for the Northern District of Illinois and the Fraud Section of the Commercial Litigation Branch of the Justice Department’s Civil Division. The OIG — which had its May report on E/M upcoding countered by CMS evidence on how low the reward is for across the board audits of these types of claims — is providing assistance in the case, along with the Office of Personal Management’s Office of Inspector General and the Railroad Retirement Board’s Office of Inspector General. Assistant U.S. Attorney Eric Pruitt and DOJ Senior Trial Counsel Elizabeth Rinaldo are representing the government in the case.