Government fires back in false claims suit against Prime: 6 things to know

In September, Prime Healthcare Services asked a federal court to exclude certain evidence used by the Department of Justice in a lawsuit alleging the Ontario, Calif.-based hospital chain violated the False Claims Act. Now, the federal government has responded.

Here are six things to know about the lawsuit against Prime.   

1. The DOJ intervened in a whistle-blower lawsuit against Prime in May. The lawsuit alleges Prime defrauded the federal government of millions of dollars by billing Medicare for medically unnecessary inpatient short-stay admissions, which should have been classified as outpatient or observation cases.

2. Karin Bernsten, RN, filed the whistle-blower suit against Prime in 2011. She serves as director of performance improvement at Prime's Alvarado Hospital in San Diego. Ms. Bernsten accuses Prime leadership of forcing caregivers at Alvarado Hospital to avoid admitting patients for observation. The suit estimates that Alvarado's fraudulent short-stay inpatient admission billings exceed $8 million. Ms. Bernsten claims the same practices were used at Prime's other hospitals throughout California, which resulted in false billings totaling more than $50 million.

3. In a motion filed in early September, Prime asked the U.S. District Court for the Central District of California to issue an order excluding the DOJ's use of statistical sampling and extrapolation in the case.

4. In its motion, Prime cites to a Supreme Court case, which states the test for determining whether sampling is proper in a case is "the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action."

"Based on Medicare's eligibility standard for inpatient care, the government's use of statistical sampling to extrapolate the falsity of claims relating to the appropriateness of inpatient admissions and associated diagnoses is legally impermissible under the FCA in this case because such extrapolation is simply not reliable," according to Prime's motion.

5. In a response filed Thursday, the government claims Prime's request for the court to exclude certain evidence is premature.

"In asking the court to 'exclude' anticipated 'evidence' as 'unreliable,' Prime avoids calling the evidence motion what it really is: an in limine or Daubert motion. Either type of motion would be premature as Prime has yet to answer the government's complaint in intervention, and the evidence Prime seeks to exclude is not yet complete and of record," states the government.

6. Even if it was the right time to bring the evidence motion, the government claims Prime's motion is "meritless."

"The [False Claims Act] does not prohibit statistical evidence, and its history and broad remedial purpose are antithetical to that kind of categorical evidentiary restriction," according to the government.

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