Qui Tam Whistleblower Lawsuit Goes After “Up Coding”

Atlanta, GAThe Medical Center, Navicent Health (“Navicent”) has agreed to pay $2,549,742 to the United States and the State of Georgia to resolve allegations that it violated the federal False Claims Act (FCA) and the Georgia False Medicaid Claims Act by submitting inflated bills for ambulance transportation. The qui tam whistleblower lawsuit that brought about the settlement is significant because it targeted the common practice of “up coding.” Up coding occurs when providers inflate the claims submitted to Medicare or Medicaid by misrepresenting the complexity or emergency nature of services provided.

The suit, which was unsealed in May, describes two forms of healthcare fraud: first, that Navicent billed for non-emergency ambulance trips at the higher emergency rate; and second, that ambulance transportation was neither appropriate nor medically necessary in many of these situations. In addition, the relator, Andre Valentine, a former Navicent paramedic, claimed that his employment was wrongfully terminated because he questioned what appeared to be improper and fraudulent billing practices.

Ambulance billing has long been recognized as an area of potential fraud on the Medicare and Medicaid programs. In this situation, since Navicent owned and operated both the hospital and ambulance service, the profits from the systemic deception went directly to hospital’s bottom line.

The settlement marks the end of a 27-month federal/state investigation that began when Valentine filed suit in 2015. According to a press release issued by the Georgia Attorney General, the investigation involved the Department of Health & Human Services, Office of Inspector General, the United States Attorney’s Office for the Middle District of Georgia, and the Georgia Medicaid Fraud Control Unit. The process depended on sophisticated data analytics in addition to traditional investigative techniques.

The United States and the State of Georgia chose to litigate the case in United States District Court on May 6,2017 and Navicent agreed to the settlement in August. As the relator in the FCA and Georgia state actions, Mr. Valentine will receive a share of the settlement payment.

The Navicent settlement precedes by only a few weeks a $280 million Celegene settlement relating to off-label cancer drug promotion. Together, they illustrate a continued focus on healthcare fraud in FCA investigations. The Navicent case suggests, however, a new focus on federal/state partnerships and increased use of sophisticated data analysis as a prosecutorial tool in qui tam whistleblower lawsuits.