EXPERT INSIGHTS—'Upcoding' In The Code: District Court Holds Software Billing Company Could Be Liable For Causing False Claims, (Jun 11, 2024)

Software provider liable for false billing even if not billing the government directly.

In a recent decision, U.S. ex rel. Schieber v. Holy Redeemer Healthcare System, Inc., the U.S. District Court for the District of New Jersey declined to dismiss a federalqui tamcase against Homecare Homebase, LLC (HCHB), the developer of what its website calls the "#1 software for home-based care," for allegedly causing home health providers to submit false claims for Medicare reimbursement. In so doing, the court held that the billing software—by allegedly prompting users to "upcode" the number of necessary treatments—could itself cause the submission of false claims.

The relator alleged that HCHB intentionally designed its software application in a way that caused home health providers to inflate their service claims and thus increase their reimbursements. Specifically, the relator claimed that HCHB's software automatically and repeatedly prompted providers assessing the