On June 30, 2016, Renown Health, one of the nation’s largest healthcare facilities in Reno, Nevada, agreed to pay the Government $9.5 million to settle a qui tam lawsuit alleging that Renown Health violated the False Claims Act (FCA) by knowingly and consistently overbilling the government for out-patient services at a much more costly in-patient rate. The lawsuit was filed by former employee, Cecilia Guardiola, under the whistleblower provision of the FCA.

Ms. Cecilia Guardiola was hired by Renown Health in June 2009 as Director of Clinical Documentation and later promoted to Director of Clinical Compliance. While serving as director, she noticed on-going technical billing discrepancies surrounding various types of patient care.  For example, Ms. Guardiola discovered that Renown allegedly submitted claims to Medicare for in-patient care when, in fact, patients had never been admitted into the hospital.  At first Ms. Guardiola attributed these alleged inconsistencies to an outdated billing system, but later found that Renown Health intentionally implemented billing processes designed to improperly assign inpatient admission.  In January 2012, after repeatedly bringing her concerns to management and constantly getting ignored and discounted, Ms. Guardiola resigned her position with Renown Health.  On June 1, 2012, she filed a lawsuit against Renown alleging that it knowingly violated the FCA by intentionally overcharging the government for services it did not provide – thereby committing healthcare fraud.

Renown Health is a not-for-profit healthcare facility located in Reno, Nevada, with a network of hospitals and healthcare facilities throughout northern Nevada. It reports that in fiscal year 2011 it generated $1.7 billion patient revenue, including inpatient admissions and emergency room visits at its main hospital in Northern Reno and at its Renown South Meadows Medical Center in South Reno.  Although Renown agreed to a $9.5 million settlement, it maintains that no laws were broken, and that the claims brought on by Ms. Guardiola alleging that Renown, for example, submitted 579 individual inpatient claims for “zero-day stays” where patients were admitted and discharged the same day, is grossly overstated and that Ms. Guardiola did not take into account other important factors regarding the patients hospital visit.

In as much as healthcare fraud is a violation of the FCA, costing taxpayers billions of dollars a year in lost revenue, it often goes unnoticed because government agencies cannot police every healthcare facility in the country. It is expected that healthcare facilities will abide by laws and procedures designed to protect patient interests and Government subsidized healthcare.  However, unfortunately many healthcare facilities do not abide by the law.  That is why the government has made it possible for citizens to be able bring their own qui tam lawsuit on behalf of the Government under the FCA as a whistleblower.