Last month, the United States Supreme Court declined a request by a whistleblower to take up a case in which an appellate court affirmed a lower court’s dismissal of a $61.8 million False Claims Act case.
The case, United States ex rel. Integra Med Analytics LLC v. Baylor Scott & White Health, alleged that Baylor Scott, a not-for-profit healthcare system in Texas, used inflated codes to bill Medicare. Integra Med is a forensic analysis firm and professional whistleblower with multiple FCA cases across the country. The federal government declined to intervene in this case, leaving Integra Med to pursue it on its own.
The allegations specifically concerned the health system’s use of secondary diagnosis codes. Secondary codes are related to medical conditions that either co-exist at the time of an admission, develop subsequently, or affect the treatment received and/or length of stay. In this case, the Relator alleged that Baylor’s upcoding involved “Complication or Comorbidity (CC) or a Major Complication or Comorbidity (MCC).
Integra Med alleged that Baylor, fraudulently used higher-value codes than were justified by actual medical diagnoses to increase its revenues. Integra Med filed its lawsuit based, in large part, on statistical data gleaned from publicly accessible Medicare inpatient claims data between 2011 and 2017. It did, however, also present testimony from a former employee who said she quit because she was being pressured to upcode.
The Relator also alleged that the health system encouraged others to inflate billing, offered training on how to upcode, pressured physicians to alter their diagnosis, and provided unnecessary treatment.
In dismissing the complaint, the district court cited a Centers for Medicare & Medicaid (CMS) regulation that states that the agency does “not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record.” The judge also found that Integra Med was unable to prove that Baylor was intentionally submitting false claims.
Baylor appealed to the Fifth Circuit, which affirmed the dismissal with prejudice. Integra Med appealed to the U.S. Supreme Court, which denied its request to review the case.
The court’s dismissal brings into question whether companies like Integra Med, which do not necessarily directly witness fraud, but that use statistical anomalies to root out what appears to be fraud, will succeed at future whistleblower efforts.
Several such professional whistleblowers have cropped up in recent years and similar cases are winding their way through the courts. Some have argued that the type of data published online by the government, and which Integra Med relied on, should be insufficient to provide a basis for a FCA suit under the public disclosure bar, which prohibits a Relator from bringing a False Claims Act lawsuit based on a fraud that has already been disclosed through certain public channels, unless the Relator is an original source of the information.
The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For more information give us a call at 05-358-4500 or send us an email to email@example.com and let’s discuss how we might be able to assist you.