MedStar Remains as Lone Hospital System in False Inpatient Admissions Suit


A federal judge last week left Columbia, Md.-based MedStar Health Inc. as the only remaining hospital system to face claims it conspired with a revenue-cycle vendor to submit false admissions certifications for patients covered by Medicare.

However, the attorney who brought the case assured me that the case had a much more nationwide scope than just the Washington area’s MedStar. “This is a national case of money over medicine,” Brad Pigott of Pigott & Johnson, PA in Jackson, Miss., told me.

Judge Robert M. Dow Jr. of the U.S. District Court for the Northern District of Illinois March 22 dismissed claims in the suit brought against Houston-based Methodist Health Care System Inc., Little Rock-based Baptist Health Hospitals Inc. and Southeast Health Systems Inc. of Cape Girardeau, Mo.

The case was brought under the False Claims Act by a former employee of MedStar, Cherry Graziosi, who alleged all of the named hospitals worked with the vendor, Chicago-based Accretive Health Inc., to change recommended patient treatments to increase the number of inpatient admissions at the hospitals.

Graziosi alleged the changes were made by individuals who weren’t qualified to judge the medical necessity of an inpatient admission for patients and with an eye toward providing a revenue boost for MedStar. Medicare paid more for inpatient admissions than it did for observation stays.

Dow dismissed all the hospital systems other than MedStar because, he said, Graziosi was only employed by MedStar and thus could only provide concrete evidence about that hospital group’s actions.

Pigott said he expects that the discovery process will lead to his client being able to amend her complaint to add additional claims against those institutions as well as other hospitals not yet named. “We hope to see them again and hope for other hospitals to be held accountable for saying yes to this practice,” he said.

Read my full story about the case here.

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