U.S. ex rel. Oughatiyan v. IPC the Hospitalist Co. – Feb. 2015 (Summary)

FALSE CLAIMS ACT – “UPCODING”

U.S. ex rel. Oughatiyan v. IPC the Hospitalist Co., No. 09C5418 (N.D. Ill. Feb. 17, 2015)

The United States District Court for the Northern District of Illinois granted in part and denied in part a physician group’s motion to dismiss a False Claims Act lawsuit brought by a physician who had formerly worked for the group as a hospitalist. The government intervened in the lawsuit,   which alleged that the physician group, along with its subsidiaries and affiliates, submitted false claims to the government by “upcoding” or billing Medicare and Medicaid for higher and more expensive levels of medical service than were actually performed. For example, the government alleged that one member of the physician group billed for 43 hours’ worth of services in a single day of work.

The physician group filed a motion to dismiss, arguing that the government’s complaint did not provide an adequate level of detail about the alleged fraud. The court agreed in part with the physician group. Analyzing this claim, the court explained that a lawsuit is generally expected to describe alleged fraud with a level of particularity roughly equivalent to that in the first paragraph of a newspaper story. In this case, the court concluded that the complaint had failed to explain what sort of role the group’s subsidiaries and affiliates played in the alleged false claims. Based upon this, it granted the physician group’s motion to dismiss, but only insofar as the lawsuit implicated its subsidiaries and affiliates. The rest of the government’s case was allowed to go forward.