Combat Medicare Fraud: False Claims Act Tips

Combat Medicare Fraud: False Claims Act Tips

Medicare fraud unfortunately happens more often than we’d like to admit. Government reports estimate that around $60 billion is lost annually to Medicare/Medicaid scams and abuse. And that’s not even counting private insurers!

Luckily, theirs a powerful tool called the False Claims Act (FCA) that allows whistleblowers to sue on behalf of the government and collect a reward. But navigating the legal landmine can be tricky. This article provides tips for would-be FCA whistleblowers based on real case studies and legal precedants.

What is the False Claims Act

The FCA makes it illegal to knowingly submit false claims to the federal government. Common examples include:

• Billing for services that weren’t provided
• Upcoding procedures for higher reimbursement
• Falsely certifying compliance with rules to win contracts

Under the law, whistleblowers can file a “qui tam” lawsuit on behalf of the government against the fraudsters. If successful, the whistleblower receives a reward of 15-30% of funds recovered. So it can be lucrative. Nearly $6 billion was paid out to realtors in recent years.

Medicare Fraud Case Studies

To understand how the False Claims Act works, its helpful to learn from real-world Medicare fraud prosecutions:

Home Health Fraud

A common schemes involves home health agencies billing for services never performed. For example, the owner of Nurses Network and Florida Home Aides was sentenced to 8 years in prison for this.

The company billed Medicare for physical therapy, occupational therapy, and skilled nursing that patients didn’t need or never recieved. They also paid kickbacks for referrals. Over $5 million was fraudulently collected. The whistleblower who initially brought the suit received a nice cut of the proceeds.

Hospice Fraud

Hospices are also hotbeds for False Claims Act cases. For example, Vitas Hospice Services paid $75 million to settle FCA allegations they submitted false claims for people who weren’t terminally ill enough to qualify for the benefit.

The whistleblower was a sales rep who witnessed the company’s pressure to enroll ineligible patients. He received $15 million (20 percent) for reporting it under the FCA’s qui tam provisions.

Tips for Would-Be Whistleblowers

The prospect of big rewards under the False Claims Act is certainly enticing. But their are many pitfalls to avoid. Here are tips for would-be whistleblowers:

Assess the Strength of Your Case

The FCA requires “knowing” submission of false or fraudulent claims. Negligent mistakes generally don’t qualify. So the strength of evidence is key. As a whistleblower, having inside documentation like emails showing intent to defraud is extremely valuable.

Also, the potential value of the case matters. The government devotes more resources to big, systemic frauds. Small, isolated incidents of questionable claims may not warrant attention without indications of wider problems.

Consider Anonymity Risks

You can file a FCA lawsuit under seal without disclosing your identity initially. However, the secrecy rarely holds forever. Once the government launches an intervention, your identity will likely come out during discovery or trial. And retaliation is illegal but still occurs frequently enough according to advocacy groups.

Don’t Go It Alone

Navigating FCA investigations and litigation is extremely complex. Working with an experienced whistleblower attorney is essential. For example, specific procedures must be followed like filing under seal and providing disclosure statements. And complaints must be carefully drafted to avoid dismissal on technicalities. Lawyers generally work on contingency, taking around 30% of any reward.

Focus on Big Systemic Fraud

The Department of Justice’s 2019 guidance indicated that it focuses on prosecuting systemic, scheme-based frauds rather than isolated incidents. So structural abusive activities taking place over years offer the greatest chance of sparking interest. Having evidence illustrating written policies or pressure from management to engage in fraud is extremely compelling.

The Risks and Rewards of Blowing the Whistle

Filing a False Claims Act lawsuit carries both huge financial upside and downside risks from retaliation to reputation harm. Whistleblowing is extremely difficult emotionally. But the law allows people to take a stand against fraudsters stealing billions meant for patient care. Billions that pad the pockets of scammers while patients suffer. It’s important work. The tips here hopefully help anyone thinking of combating Medicare fraud to consider the pros/cons and avoid potential pitfalls.

Citations

[1] Department of Justice Recovers $6 Billion in False Claims Act Cases

2
Owner of Home Health Care Company Sentenced for Medicare Fraud

3
Vitas Hospice Pays $75 Million to Settle False Claims Allegations

4
Advocacy group on whistleblower retaliation

5
DOJ Guidance on False Claims Act