Healthcare org charged with extending Medicare patient stays to qualify for skilled nursing care

Atlantic Health System health system has been charged by a whistleblower that it designated Medicare beneficiaries as inpatients and prolonged their hospital stay to qualify them for skilled nursing care. In the case, filed in federal court, a Judge has ruled that this case may proceed and denied a Motion To Dismiss by the Atlantic Healthcare System. The whistleblower contends that the defendants improperly billed for inpatient rather than observation care to inflate their reimbursements, and that they “essentially stated” that they had full discretion to classify patients “as they pleased,” according to court documents

A whistleblower can now continue to pursue charges that a New Jersey health system improperly designated Medicare beneficiaries as inpatients and sometimes prolonged their hospital stay to qualify them for skilled nursing care.

The case involves a number of practice groups and physicians allegedly engaged in the practices at hospitals operated by Atlantic Health System. They sought to have the charges dismissed for some of these hospitals, arguing that the legal complaint did not lay out specific enough allegations implicating these locations.

The defendants’ arguments might have been persuasive in “other circumstances,” but not in this False Claims Act case, ruled Judge William J. Martini of the U.S. District Court, District of New Jersey. “In other cases, courts have accepted, for purposes of a motion to dismiss, that a defendant violating the FCA in one location was engaging in the same conduct in another location,” he said in his denial of the Motion.

Other hospitals and healthcare organizations have been charged with similar activities.  The nation’s largest hospital organization recently reached a $98 million settlement to resolve charges that it improperly categorized people as inpatients.

Jeff Newman represents whistleblowers