Justice Department Opts to Intervene in Whistleblower Lawsuit Against IPC the Hospitalist

The U.S. Department of Justice has opted to intervene in a whistleblower lawsuit against IPC the Hospitalist, Inc. – a nationwide group of physicians focused on the practice of the “delivery of hospital medicine and related facility-based services.” According to the allegations, IPC has engaged in the consistent practice of overbilling government healthcare programs like Medicaid and Medicare to the tune of tens of millions of dollars.

With 1,100 practices spanning 28 states, the settlement between the government and IPC could be sizable – resulting in a whistleblower reward of up to 30 percent for the relator, a California-based physician who worked for IPC in a San Antonio facility from 2003 through 2008.

Details of U.S. ex rel Oughatiyan v. IPC The Hospitalist Co.

The facts of the case against IPC are all too familiar: overbilling, upcoding, and profiting from services never rendered. More specifically, the relator asserts that IPC instructed its doctors to submit invoices for medical services that would reap a higher reimbursement than those actually provided. In addition, the complaint alleges that IPC kept a close watch over doctors’ Medicare billing statistics and provided bonuses to those with the highest level of admissions, evaluations, and treatment of government healthcare enrollees.

The complaint goes on to highlight several billing statistics, which the plaintiff asserts reveal the “fraudulent culture” of IPC and its training process. For example, a review of five of the hospitalists’ billing records immediately after joining IPC show billing at the lowest level 6.9% of the time, intermediate level 58.6% of the time, and highest (most costly) level 34.5% of the time. Those same physicians, after receiving IPC training, did not submit a single bill for the lowest level of reimbursement, submitted 8.9% of bills on the intermediate level, and 91% of bills submitted were on the highest level.

The plaintiff further alleges that IPC encourages and rewards doctors who are able to see the highest number of patients per day – some reportedly treating 65 hospital patients per day. The plaintiff contends this reward system significantly jeopardizes patient care and inevitably decreases the amount of time the doctor can spend with each patient.

Status of the Case

The United States opted to intervene in the case in December of last year. U.S. Attorney Zachary T. Fardon from the Chicago United States Attorney’s office commented on the matter, stating, “IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed — a practice commonly referred to as ‘upcoding….’”

This was reiterated in the government’s complaint, which alleges that “[l]ow-billing hospitalists are pressured to use more complex billing codes that reimburse at higher rates and increase net revenue per patient….Hospitalists who consistently use more moderate billing codes are pressured by IPC … management to change that practice.”

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