Shares of IPC The Hospitalist Co. continued to fall on Wednesday following news that the U.S. Justice Department has filed a lawsuit accusing the company of fraudulently overbilling Medicare, Medicaid and other government health programs.
The North Hollywood company, which provides doctors to hospitals and nursing homes, was targeted on Tuesday by a U.S. District Court lawsuit in Chicago that alleged IPC submitted bills for more expensive levels of medical care than were actually performed, a practice called “upcoding.”
It also accused the company of “systematic overbilling” because it trained and pressured doctors to upcode.
IPC issued a statement that it is working with the Justice Department toward a resolution.
“The company believes it has a strong compliance focus, and that it operates with appropriate billing policies, procedures, provider training, and compliance programs and controls. It is not possible to predict when this matter may be resolved or what impact, if any, the outcome of this matter might have on the company's consolidated financial position,” the statement said.
An original lawsuit was filed in 2009 by a doctor who formerly worked for IPC in San Antonio, Texas. The Justice Department joined the suit under the “whistleblower” provision in the False Claims Act. Such actions often result in large monetary settlements from companies.
On Tuesday, the day the lawsuit was disclosed, shares fell 3 percent. Shares on Wednesday fell another 19 cents, or about half a point, to $38.65 on the Nasdaq.