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In her lawsuit against Prime Health System (PHS), risk manager Karin Berntsen claims that she witnessed leaders at Alvarado Hospital in San Diego encouraging Medicare fraud.
This is an excerpt from her lawsuit in which she makes that claim:
"In January 2011, more than 250 employees, including most of Alvarado Hospital’s Quality and Risk Management Department staff, were dismissed by PHS. At about the same time, [Prime founder and chairman Prem Reddy, MD] implemented a monthly Hospitalist Meeting attended by the senior and high-volume admitting physicians as well as key administrators. The first such meeting was convened on February 1, 2011, at which time Dr. Reddy startled those present by stating, We don’t do observation. All patients should be inpatient. You can always find a reason to make the patient an inpatient.’
"Dr. Reddy reiterated his instructions concerning patient admissions at subsequent Hospitalist meetings attended by Relator, including a meeting on May 3, 2011, at which he also encouraged those present to upcode by adding complications or comorbidities such as encephalopathy and fecal impaction to a diagnosis in order to increase the DRG reimbursement rate. For example, he stated: