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“Upcoding” and the False Claims Act

upcoding health care fraud

With businesses under pressure to increase their bottom lines, more and more healthcare providers are resorting to fraudulent and illegal activity to ramp up profits. For instance, several hospitals have come under fire recently for an illegal scheme known as “upcoding” – which is when a hospital or healthcare provider seeks payment for higher and more expensive medical services than those that were actually performed.

For instance, in December 2013, the government intervened in a lawsuit originally filed by Goldberg Kohn, Ltd. against IPC The Hospitalist Co. Inc. and its subsidiaries (IPC) – one of the largest providers of hospitalist services in the country. The lawsuit alleges that IPC engaged in a fraudulent upcoding scheme by encouraging its doctors to bill at the highest levels available, regardless of the level of service provided, and training physicians to use higher level codes and encouraging physicians with lower billing levels to “catch up” to their peers.

The lawsuit was filed on behalf of a former IPC physician under the whistleblower provisions of the False Claims Act. The physician and his lawyers at Goldberg Kohn applaud the government for its decision to intervene in this important case. As the government stated in its press release, “the intervention illustrates the government’s emphasis on combating health care fraud.”

Earlier this month, the A.I.M. Center, Inc. (AIM) – which operates a community mental health facility in Tennessee – agreed to pay $800,000 to settle allegations that it violated the federal False Claims Act and the Tennessee Medicaid False Claims Act. The lawsuit alleged that AIM had engaged in “upcoding” by submitting claims for services that were lengthier and more expensive than the services actually provided.  For instance, AIM would submit claims for a full day of psychosocial rehabilitation services even when the members spent as little as 5 minutes to an hour at the facility.

Not only does upcoding cheat the government and taxpayers out of healthcare funds, but it can also put a patient’s health at risk by reflecting inaccurate information in their medical records. Under the False Claims Act, whistleblowers who assist the government in going after those healthcare providers who engage in illegal upcoding schemes are able to share in the ultimate recovery obtained by the government, regardless of who the defendant is and regardless of the amount of the recovery.

The whistleblower attorneys at Goldberg Kohn are committed to fighting fraud against the government and protecting the rights of whistleblowers. Please contact us at (312) 863-7222 if you have information about upcoding or would like to schedule a free, confidential appointment with one of our nationally-recognized whistleblower attorneys.

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55 East Monroe Street
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