In a significant victory against healthcare fraud, U.S. ex rel. Berntsen vs. Prime Healthcare, et al. resulted in a $65 million False Claims Act (FCA) settlement announced on August 3, 2018. The case, filed in 2011 in the United States District Court for the Central District of California, was brought forward by whistleblower Karin Berntsen, a former employee at Prime Healthcare’s Alvarado Hospital in California.
At the time of the lawsuit, Prime Healthcare operated 14 hospitals in California, all of which were named as defendants. Berntsen’s complaint, based on firsthand knowledge, exposed two fraudulent billing schemes:
The United States government intervened in the medical necessity fraud allegations, while Berntsen and her legal team pursued the upcoding claims. The settlement resulted in:
For her instrumental role in exposing this fraud, Karin Berntsen was named the 2018 “Whistleblower of the Year” by the Taxpayers Against Fraud Education Fund.
One of the most significant aspects of this settlement was the personal financial liability of Prime Healthcare’s CEO, Dr. Prem Reddy. Of the $65 million total settlement, $3.25 million was required to be paid directly by Dr. Reddy. The Government’s Complaint in Intervention specifically cited multiple instances of misconduct where Dr. Reddy was personally involved, underscoring the severity of the allegations.
The magnitude of the fraud prompted the imposition of a Corporate Integrity Agreement (CIA)—a government-mandated oversight mechanism designed to ensure compliance and prevent future misconduct within Prime Healthcare. The CIA introduces additional reporting requirements and safeguards to hold the hospital system accountable.
This $65 million FCA recovery is part of a long history of successful False Claims Act cases led by Wilbanks & Gouinlock, which has repeatedly taken on large hospital chains engaged in systemic fraud. This case serves as a powerful reminder of the importance of whistleblowers in protecting taxpayer dollars and ensuring integrity in the healthcare system.
If you have information about healthcare fraud and need guidance on False Claims Act litigation, contact Wilbanks & Gouinlock today to learn more about your legal options.
If you have information about healthcare fraud, contact our office for a free, confidential consultation:
This article is for informational purposes only and should not be considered legal advice.
To determine whether you have a potential case, please complete the Case Evaluation form by clicking the button above, and a member of our team will contact you as soon as possible. To learn more about whistleblower protections, click here.
You don’t have to go it alone. Our attorneys have successfully represented whistleblowers in some of the largest fraud cases in the country, delivering real results while protecting our clients. Take the first step today.