The Justice Department is taking over a private whistleblower lawsuit against IPC The Hospitalist Co. Inc., alleging the company overbilled the government’s Medicaid and Medicare programs, the department announced Monday.
The North Hollywood company, which provides “hospitalist” doctors that oversee inpatient care, is accused of “upcoding,” an illegal practice in which payment is sought for more expensive medical procedures than actually performed.
The lawsuit was originally filed under seal in 2009 by Bijan Oughatiyan, a Dallas physician who worked for IPC in San Antonio from 2003 to 2008, under the qui tam, or whistleblower, provisions of the False Claims Act.
The federal lawsuit alleged IPC encouraged its doctors to bill the government at the highest levels regardless of the service provided. The suit also alleges IPC trained physicians to use higher-cost billing codes.
The false claims law permits private individuals to sue on behalf of the government and share in any recovery. The law also allows the government to “intervene” or take over a lawsuit and recover three times its damages plus civil penalties.
The original lawsuit was unsealed Dec. 6 in U.S. District Court in Chicago. The Justice Department has asked the court for 120 days to file its own complaint.
IPC declined comment in an email, citing the ongoing litigation.
Shares closed down $1.48, or 2.4 percent, to $60.81 on the Nasdaq.