Prime claims DOJ fraud suit wrongly relies on statistical sampling

Prime Healthcare Services has 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.

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.

In a motion filed Thursday, 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.

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.

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.

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