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IPC The Hospitalist Sued by U.S. for Overcharging on Fees

IPC The Hospitalist Co. (IPCM), which employs doctors and health-care service providers in 28 states, has overcharged U.S. health-care programs by “millions of dollars,” according to a federal lawsuit.

“IPC physicians sought payment for higher and more expensive levels of medical service than were actually performed -- a practice commonly referred to as ‘upcoding,’” Chicago U.S. Attorney Zachary T. Fardon said today in a statement.

The U.S. is intervening in a whistle-blower complaint filed under seal in 2009 against the North Hollywood, California-based business by a doctor who worked for the company in San Antonio from 2003 to 2008. It was ordered unsealed by U.S. District Judge Ruben Castillo in December.

The Justice Department has recovered more than $17 billion through federal False Claims Act cases since January 2009, with more than $12.2 billion recovered in cases involving fraud against federal health programs, according to Fardon’s statement.

Hospitalists are acute-care specialists who focus on the care of patients from the time they’re admitted to a hospital until they’re discharged, according to IPC’s website. Its workforce includes about 2,500 such providers at 400 acute-care hospitals and 1,100 post-care facilities.

More than half the of the company’s revenue has come from government insurers, including Medicare and Medicaid, Fardon said, further alleging the company pressured its physicians to upcode.

Company Statement

“IPC has, and continues to, fully cooperate and work toward a resolution with the Department of Justice,” said Elaine Murphy, a company spokeswoman with Scott Public Relations in Canoga Park, California.

IPC fell $1.31, or 3.2 percent, to $38.88 at 3:54 p.m. in Nasdaq Stock Market trading.

The U.S. is seeking money damages which would be tripled under the False Claims Act, together with civil penalties of as much as $11,000 for each false claim the company is found to have submitted.

“IPC’s upcoding scheme has, and still continues, to cause Medicare, Medicaid and other federal payors to overpay millions of dollars to IPC,” according to the government’s complaint, which didn’t claim a specific amount of loss.

The case is U.S. ex rel Oughatiyan v. IPC The Hospitalist Co., 09-cv-5418, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net. Joe Schneider, Andrew Dunn

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