Knoxville-based TeamHealth Holdings has agreed to pay $60 million plus interest to settle a case brought against its subsidiary IPC Healthcare Inc., according to the Department of Justice.

The hospitalist service provider is based in North Hollywood and was acquired by TeamHealth for $1.6 billion in late 2015.

The government argued that IPC allegedly encouraged its physicians to bill for higher levels of services than actually provided, a practice known as “up-coding.” In addition, IPC allegedly pressured its hospitalists with lower billing numbers to “catch up” to their co-workers who were billing higher amounts.

From there, the fraudulent bills were allegedly submitted to Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program, which violated the False Claims Act.

“This settlement reflects our ongoing commitment to ensure that health care providers appropriately bill government programs vital to patient health care,” Chad Readler, acting assistant attorney general, said in a statement.

As part of the settlement, TeamHealth signed a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services to better hold the company accountable for its billing practices.

The lawsuit was brought on by former IPC employee Dr. Bijan Oughatiyan, who will receive $11.4 million from the settlement.