Note from the ACDIS Director: Providence Health/J.A. Thomas lawsuit inching closer to resolution

By Brian Murphy

Developments continue in a $188.1 million lawsuit against Renton, Washington-based Providence Health & Services, with a judge presiding over the case requesting additional documentation from both parties to determine if the suit will continue or be dismissed.

In a story reported here in CDI Strategies on August 23, Texas-based Integra Med Analytics LLC in August 2018 filed a lawsuit against the a 34-hospital system and its consultant, J.A. Thomas. Integra Med Analytics demanded a jury trial on behalf of the United States under the False Claims Act. The lawsuit claimed that Providence Health & Services and J.A. Thomas (the defendants) were allegedly upcoding various diagnoses, including severe malnutrition, encephalopathy, and respiratory failure.

Notably, the government declined to be a party in the litigation.

In a follow-up to the story in November, Providence and J.A. Thomas responded to the allegations with a formal call for dismissal. Lawyers for the defendants accused Integra of “attempting to make a quick buck by using data from CMS to allege fraud.” The lawyers reasoned that if the case was permitted to go forward, it could “give rise to a cottage industry of serial relators filing claims to extort money from healthcare providers.”

Whistleblower provisions under the False Claims Act were established to reward insiders for coming forward, the lawyers wrote, rather than to support vigilante justice from outside parties. Additionally, Integra’s allegations were based on publicly reported Medicare claims data, not on actual chart reviews. Because of this fact, lawyers claimed that the allegations do not stand up to the public disclosure bar—meaning, since the information was already publicly disclosed, the whistleblower suit was not based on “original information” and therefore does not classify as a False Claims Act suit.

The latest on this developing story came on February 13, when the United States District Court/Central District of California held a hearing on the defendant’s motions to dismiss the lawsuit. The court indicated its decision on these motions could be aided by additional submissions from both parties, and requested additional briefs and materials no later than March 8.

These additional materials would allow the court to render a decision on whether the case will proceed or be dismissed. Under review is whether Integra’s claims meet the public disclosure bar under the False Claims Act. The defendants contend that Integra’s case relies on evidence of J.A. Thomas’ business practices obtained from publicly available websites, including news media outlets, which is not permitted under the False Claims Act.

ACDIS will continue to monitor this case for future developments.

Editor’s note: Murphy is the director of ACDIS. Contact him at bmurphy@acdis.org.