U.S. ex rel. Assocs. Against Outlier Fraud v. Huron Consulting Group, Inc. (Summary)

FALSE CLAIMS ACT

U.S. ex rel. Assocs. Against Outlier Fraud v. Huron Consulting Group, Inc., No. 09 Civ. 1800 (JSR) (S.D. N.Y. Mar. 5, 2013)

In this False Claims Acts (“FCA”) case, the United States District Court for the Southern District of New York granted summary judgment in favor of a consulting firm hired to revitalize a hospital’s revenue cycle, and its fiscal intermediary.

The hospital’s board retained a consulting firm, which recommended that the hospital increase its pricing, which the hospital did, and which also increased the hospital’s outlier reimbursements from Medicare. A hospital administrator contacted its fiscal intermediary and disclosed that she was concerned that the hospital may have received excessive outlier payments after the price increases.

While the court found that raising the hospital’s charges while benefitting from a stale cost-to-charge ratio may have been a bad practice, it found that it was not forbidden. Therefore, it granted summary judgment to the consulting firm on the FCA claims against it.

The relator also alleged that the fiscal intermediary violated the FCA by recklessly authorizing the payments in violation of its contract with the government. The trial court also found that no statute or regulation expressly requires a fiscal intermediary to refuse to forward any outlier charge that is calculated based on a stale cost-to-charge ratio. Instead, the reconciliation process, through which excessive reimbursements are recovered, only requires fiscal intermediaries to flag potential excess reimbursement, which it did. Therefore, the court granted summary judgment to the fiscal intermediary on the FCA claim against it as well.