On December 12, the U.S. Department of Justice (DOJ) announced a significant settlement involving Oroville Hospital, which has agreed to pay $10.25 million to resolve allegations of violating the False Claims Act.
The DOJ’s investigation revealed that Oroville Hospital allegedly submitted false claims to Medicare and Medicaid, inflating the costs of patient care through improper billing practices. Specifically, the hospital is accused of admitting patients for inpatient care that was not medically necessary, billing Medicare and Medicaid for more expensive services than the patients required, offering financial incentives to physicians in the form of bonuses to encourage them to admit patients to the hospital for unnecessary stays, and inflating the cost of care billed to federal programs by using incorrect diagnosis codes to justify the unnecessary hospitalizations. These actions, according to the DOJ, not only harmed the government’s healthcare programs but also posed a risk to the patients involved, as decisions may have been influenced by financial gain rather than patient care.
Brian M. Boynton, Principal Deputy Assistant Attorney General and head of the DOJ’s Civil Division stated that “[i]mproperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans [.]” Phillip A. Talbert, U.S. Attorney for the Eastern District of California, echoed similar sentiments, stating, “Physicians should make decisions based on the best interests of their patients, not their own personal financial interests.”
The settlement stems from a qui tam whistleblower lawsuit filed by Cecilia Guardiola, a former employee of the hospital. In this case, Guardiola is set to receive $1.7 million as her share of the settlement. Amid the government’s ongoing efforts to strengthen the False Claims Act, Guardiola’s financial windfall could encourage more whistleblowers to report allegations of fraud.
The DOJ’s continued focus on fraud cases like this one demonstrates that authorities are committed to holding healthcare providers accountable for improper billing and other fraudulent activities. As whistleblowers like Cecilia Guardiola continue to play a pivotal role in FCA lawsuits, healthcare providers must remain diligent in ensuring proper billing practices.