CHICAGO – A federal judge has lifted a seal on a qui tam action in which a former Presence Health employee accused the company of charging Medicare and Medicaid for drugs never administered to patients.
In an order filed March 7, U.S. District Judge Ruben Castillo lifted the seal on a complaint originally filed March 21, 2017, by pharmacist Hope Walsz against Presence Health. The lawsuit was filed as a qui tam suit, meaning it was ostensibly brought on behalf of the state and federal governments to recover amounts paid allegedly by the state of Illinois and U.S. government under allegedly false claims.
The judge lifted the seal after lawyers for both the state of Illinois and U.S. Department of Justice said they would decline to intervene in the case and would allow her to sue on their behalf.
As such, Walsz now stands to recover from 25 to 30 percent of any financial damages awarded or settlement amount paid, should she prevail in court, as opposed to 15 to 25 percent of the take had the governments intervened and taken control of the lawsuit.
Presence Health is no longer a distinct corporate entity, having joined Amita Health in March 2018. At the time of the complaint, it operated 11 Illinois hospitals.
In her complaint, Walsz said she has worked as a pharmacist for more than 30 years. She alleged she had observed Presence hospitals filing Medicare and Medicaid reimbursement claims for medications disbursed to in-hospital patients, but not administered and returned to the hospital pharmacy. In many cases, she said, those drugs were allegedly given to a second patient and billed again, frequently to Medicare and Medicaid.
Walsz started working as a contract employee for Provena-Resurrection Health Network in July 2008, becoming a full-time Presence Health employee in June 2009. She worked in that capacity until she resigned Feb. 26, 2016, according to the complaint. For the entire period, she worked at Presence St. Joseph Hospital in Elgin.
In the complaint, she alleged hospitals would commonly restock unused individual and bulk doses and later use them for different patients. However, she alleged Presence didn’t have a policy providing for credits or refunds for returned drugs. Walsz said similar problems arise when hospital staff may decide to administer a drug in a different method than originally prescribed, such as leaving a prepared oral dose unused in favor of the same drug being taken intravenously, intramuscularly, subcutaneously or rectally, or substituting a liquid for a solid.
Walsz further alleged Presence staff would prescribe drugs as needed, with pharmacists filling the orders with no more than what would be allowed in any 24-hour period. But unused doses would allegedly be sent back to the pharmacy to be reused without credits or refunds issued.
She accused the hospitals of also overbilling for missing doses, in which cases staff can’t find the original medication and orders a second allotment, but the patient is billed for both; for patient refusals, in which the drug is ordered and charged, but the patient declines to take the medication; for held medications, in which the drug is ordered and charged, but not administered if the patient doesn't meet certain medical criteria; and discontinued orders.
If a medication is ordered and billed, but the patient is discharged before the prescribed dosing time, Walsz alleged the patient’s account would only credited if the discharge is complete before the scheduled dosing, whether or not the medicine was actually administered.
Walsz also alleged patients are overcharged if hospital staff improperly use automated drug dispensing cabinets, a quirk that can be complicated if patients transfer from hospital units without such cabinets to those where the needed drugs are already on hand.
According to her complaint, Walsz raised her concerns with supervisors in 2014. She alleged her clinical manager said he was aware of the overbilling, but said technicians and pharmacists didn’t have time to verify patients were only charged for used doses.
Formal allegations include three violations of the Federal False Claims Act and three violations of the Illinois False Claims Act. In addition to a jury trial, Walsz said the hospital chain should be made to pay statutory penalties and triple the damages the state and federal governments sustained for being overbilled.
Walsz is represented in the matter by Siprut PC, of Chicago.