- Issue: Fraud in charges for operating room anesthesia services
Lieff Cabraser represents Rockville Recovery Associates in a qui tam or whistleblower lawsuit for treble damages and penalties under the California Insurance Frauds Prevention Act ("CIFPA"), Cal. Insurance Code § 1871.7. The Act is designed to prevent false, fraudulent, or misleading medical claims to insurers and, by extension, their policyholders.
Sutter Health Whistleblower Case Allegations
The complaint alleges that Sutter Health hospitals across Northern California submit false and misleading bills for anesthesia services to insurers and other payors in violation of the CIFPA. Specifically, the complaint alleges that Sutter hospitals charge under a particular billing code for services that were not rendered, or for services already assessed elsewhere on the hospitals' bills or on anesthesiologists' separate bills to insurers.
The lawsuit was filed in California State court in Sacramento. Named also as defendants in the lawsuit were Multiplan and Private Healthcare Systems, two companies used by Sutter to negotiate contracts with insurers and other payers.
In May 2011, the Court granted California Insurance Commissioner Dave Jones' request to join the litigation against Sutter Health.
Case Update: Record Settlement And Significant Billing Reforms
Plaintiffs succeeded in defeated multiple motions by Sutter, including three demurrers, two motions to strike, a motion to compel arbitration, and a motion to severely restrict the discovery available to Plaintiffs. In December 2011, the Court denied Sutter's motion to strike Plaintiffs' jury demand, ruling that Plaintiffs have a right to a jury trial under California law.
In November 2013, as the trial was to start, Insurance Commissioner Dave Jones announced a $46 million settlement, a record payment under the state insurance whistleblower law. Under the settlement, Sutter will bill only a one-time charge for anesthesia services during surgical procedures, rather than billing on a time basis simultaneously with its timed operating room charge and a separate, timed charge by the anesthesiologist. Sutter will also disclose the basis and average cost of these anesthesia services charges.
"Through Commissioner Jones' leadership, the state achieved a record settlement under the California Insurance Frauds Prevention Act and has fundamentally changed the way one of California's largest healthcare providers bills for anesthesia services," said Robert J. Nelson of Lieff Cabraser, lead trial counsel for the Plaintiffs and chair of Lieff Cabraser's False Claims Act practice group. "For whistleblowers and state regulators, the CIFPA is a powerful tool to reign in misleading hospital charges that harm consumers through inflated health care costs and insurance premiums."
Dr. Henry Miller, a hospital billing expert retained by the plaintiffs, commented on the importance of the settlement, "Transparent disclosures to payers and patients about opaque charges, and the costs related to the charges, are critical to bringing rationality to the complex and frustrating system of hospital billing. The settlement agreement with Sutter does just that, and it focuses charges that are especially problematic -– hospital anesthesia charges."
Contact Lieff Cabraser
If you wish to report a fraud in billing practices or in contracts with the government or insurance companies, please contact Lieff Cabraser attorney Nimish R. Desai toll free at 1-800-541-7358 or use the contact form below. We will promptly, confidentially review your case for free and without any obligation on your part.