Lower Bucks Hospital Must Pay For False Medicare Claims: Feds

BRISTOL, PA — The group that owns Lower Bucks Hospital in Bristol has agreed to pay $1.25 million after being accused of false Medicare claims at that hospital and another that it owns in Philadelphia.

U.S. Attorney William M. McSwain announced Thursday that Prime Healthcare Services, Inc. and its founder and CEO, Dr. Prem Reddy, have agreed to pay the money to the U.S. government to settle the accusations.

Federal authorities say the false Medicare claims were submitted by admitting patients to the hospital for overnight stays who required only less costly, outpatient care and billing for more expensive diagnoses than the patients had — a practice known as "up-coding."

"We are committed to ensuring that hospitals, companies that own and operate them and their executives appropriately bill Medicare," McSwain said in a news release. "Charging the government for more costly services than what the patient actually needs and billing the government for more serious diagnoses than what the patient actually has is a waste of taxpayer dollars. Those who engage in these practices will be held accountable."

Prime is headquartered in Ontario, California, and is one of the largest hospital systems in the United States. It acquired Roxborough Memorial Hospital, in Philadelphia, on Feb. 22, 2012, and Lower Bucks Hospital on Oct. 3, 2012.

In a written statement, Prime Healthcare noted that the settlement contains no finding of improper conduct or wrongdoing and that the hospital chain's record of clinical care was not questioned.

"Prime Healthcare is pleased to have resolved this lawsuit," said Joel Richlin, Prime Healthcare's deputy general counsel. "This settlement allows Prime Healthcare to continue to focus on its mission of providing quality, compassionate healthcare while saving hospitals, savings jobs, and saving lives."

The settlement resolves allegations that Prime submitted or caused the submission of fraudulent claims to Medicare. The company was accused of the false claims from the time it acquired the Philly-area hospitals through Sept. 30, 2013.

During that time, federal officials say Lower Bucks and Roxborough admitted emergency room patients for "costly and medically unnecessary" one and two-night hospital stays instead of giving the outpatient treatment.

Through Dec. 31, 2014, the hospitals also "upcoded" in-patient diagnoses to increase Medicare payments, the feds alleged.

As part of a separate lawsuit in California, Prime and Reddy paid the United States $65 million in August 2018 to settle similar Medicare-fraud charges arising at 14 hospitals in that state.

Under an agreement with the U.S. Department of Health and Human Services, the company is required to "engage in significant compliance efforts" over the next five years, including retaining an independent review organization to review the accuracy of the company's Medicare claims.

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