Boston, MA 06/18/2014 (wallstreetpr) – On Tuesday, the U.S. Federal Government slapped a lawsuit against IPC The Hospitalist Company Inc (NASDAQ:IPCM), alleging that the hospitality services company has overbilled it by more than millions of dollars for its health-care programs.
Upcoding
According to Chicago U.S. Attorney Zachary T. Fardon, the physicians at IPC sought inflated charges of medical services provided than the actual, a practice known a ‘upcoding’.The move by the Department of Justice (DoJ) comes in response to a whistle-blower complaint filed in 2009 by a doctor, who himself worked with IPC during the period of 2003-2008. Nearly half of the revenues of IPC The Hospitalist Company Inc (NASDAQ:IPCM) are generated from the government’s affiliated insurers for its health care programs, which includes Medicare and Medicaid. Fardon accused that the company forced its physicians to seek higher charges than actual, that is to upcode, in order to generate a higher cash stream.
Fardon stated that the Justice Department has recovered over $17 billion during January 2009 till now, through the Federal False Claims Act. Among the recouped amount, over $12.2 billion belonged to cases of fraudulent practices against federal health programs.
Company’s Statement
Following the legal action against the company, its shares nosedived by nearly 4% during Tuesday’s trade. The company promptly issued a statement responding to the action. In its statement, the company’s spokeswoman, Elaine Murphy, said that they are constantly working with the DoJ to come to a resolution on the matter. The company reiterated that it has a strong compliance and billing policies in place. Further, the company noted that as per the present circumstances, it is not possible to predict if the matter be resolved or what will be the consequences of its outcome on the financial position of the company.
Importantly, if the claims submitted by IPC The Hospitalist Company Inc (NASDAQ:IPCM) are found out to be false then it might have to pay three times the claim amount under the False Claims Act, along with the penalties of $11,000 for each claim.
