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Sutter Anesthesia Billing
- Issue: Fraudulent billing of anesthesia services
State of California, ex rel Rockville Recovery Associates, Ltd. v. Multiplan, Inc., et al. False Claims Case
Lieff Cabraser represents whistleblower Rockville Recovery Associates in a qui tam suit for treble damages and penalties under the California Insurance Frauds Prevention Act ("CIFPA"), Cal. Insurance Code § 1871.7. The Act is designed to prevent fraud against insurers and, by extension, their policyholders.
The lawsuit seeks recovery for allegedly false anesthesia charges that the Sutter Hospital makes in virtually every bill Sutter submits involving a surgical procedure in one of its hospital operating rooms.
Rockville Qui Tam Factual Allegations
The complaint alleges that Sutter hospitals throughout California submit fraudulent bills for anesthesia services to insurers and other payors. 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.
This practice is in direct violation of the CIFPA. The complaint alleges that it causes thousands of dollars of fraudulent billing on a typical claim, and has contributed to the out-of-control inflation in health insurance premiums experienced by Californians.
Rockville Qui Tam Case Status
The lawsuit was filed in California State court in Sacramento. In May 2011, the Court granted California Insurance Commissioner Dave Jones' request to join the litigation against Sutter and Multiplan.
Commenting on the action of the Insurance Commissioner, Lieff Cabraser partner Robert J. Nelson stated, "These false charges are passed on to the consumers of health care in the form of higher health insurance premiums, and so play an important role in the skyrocketing costs of health insurance premiums in northern California. We are extremely grateful that the Insurance Commissioner has brought the resources of his Department to the litigation and will be working with us to end the alleged fraud."
Plaintiffs have defeated various 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. The case is now in discovery, with a trial date in July 2013.
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