On December 12, the Department of Justice (DOJ) announced that Oroville Hospital agreed to pay $10.25 million to resolve allegations that it violated the False Claims Act.
According to the DOJ, Oroville Hospital allegedly violated the False Claims Act by “knowingly submitt[ing] false claims to Medicare and Medicaid arising from medically unnecessary inpatient hospital admissions, a kickback and physician self-referral scheme, and the use of erroneous diagnosis codes.”
The DOJ alleges that Oroville Hospital admitted patients and billed Medicare and Medicaid for more expensive inpatient hospital stays, even when such care was not medically necessary. The DOJ alleges that Oroville Hospital illegally incentivized patient admissions by offering financial bonuses to doctors who worked full-time at the hospital.
“Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to protect these critical programs by pursuing those who knowingly claim reimbursement to which they are not entitled.”
“Physicians should make decisions based on the best interests of their patients, not their own personal financial interests,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Hospitals engaging in kickback schemes betray the trust placed in them by their communities and distort care decisions that should be untainted by illegal kickbacks. This settlement demonstrates my office’s commitment to preserving the integrity of public healthcare programs and ensuring that the well-being of patients remains paramount.”
This case arises from a qui tam whistleblower lawsuit filed by Cecilia Guardiola. The qui tam provisions of the False Claims Act allow individuals to file lawsuits alleging fraud in government contracting on behalf of the United States. In successful qui tam cases, whistleblowers can receive between 15% and 30% of the settlement amount.
Guardiola is set to receive $1.7 million as her share of the recovery.
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
California Hospital to Pay $10.25M to Resolve False Claims Allegations
Bipartisan Legislation Unveiled to Strengthen False Claims Act
