News: Integra Med Analytics hit with another blow in whistleblower lawsuit

Integra Med Analytics LLC was hit with another blow in their lawsuit against Baylor Scott & White, a hospital chain in Texas. The Fifth Circuit Court of Appeals has declined to revive the corporate whistleblower’s lawsuit.

Last year ago, Integra Med Analytics filed a whistleblower lawsuit under the False Claims Act to sue healthcare businesses defrauding the government. As a reward, Integra Med Analytics was set to receive between 15% and 30% of the government’s total recovery.

While whistleblowers who file suit under the False Claims Act are generally insiders who have first-hand knowledge of wrongdoing by the company, Integra Med Analytics has filed multiple whistleblower lawsuits primarily based on writing algorithms to scan publicly available healthcare data for patterns indicative of Medicare fraud.

This analyzation of hospital discharge data for suspicious patterns of comorbidity diagnoses identified several hospitals, including Baylor Scott & White, as potentially fraudulent. The analysis found exceptionally high rates of encephalopathy, respiratory failure, and severe malnutrition being applied to DRGs.

During the initial lawsuits, a court in a suit against Providence Health System found that Integra Med Analytics alleged a legitimate legal theory with sufficient particularity for its suit to move forward. However, the case against Baylor Scott & White came to the opposite conclusion.

The court also found that Integra Med Analytics’ lawsuit violated a provision of the False Claims Act called “the public disclosure bar” which states that a whistleblower lawsuit cannot be based on information that is broadly, publicly available and that takes no specialized expertise to interpret.

While both cases were originally quickly appealed, the Baylor Scott & White case has been decided with the Fifth Circuit Court of appeals reaching a unanimous decision to not revive the case. In reaching the decision, the three-judge panel pointed to Integra Med Analytics’ own legal filings, which demonstrated that non-Baylor Scott & White hospitals were also following similar coding patterns.

The case against Providence Health System continues to await final decision.

Editor’s note: Find ACDIS coverage of the initial Baylor Scott & White case here. Find ACDIS coverage of the initial Providence Health System case here