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Qui tam and Health Care Fraud

A billing administrator in a doctor’s office notices that the practice is gradually increasing its Medicare billings. Just a little bit each month, but enough money that in a year the practice had doubled the amount it billed Medicare, a federally funded healthcare program for seniors.

Out of curiosity, the billing administrator checked out the records. After more than ten years in health care, she knew how to read a chart effectively, and she figured out what was happening pretty quickly. The doctors in the practice were overstating some patient’s medical conditions, alleging that patients had conditions that were slightly more severe than the notes and numbers in the chart. They then entered a diagnosis code that had a larger fee, based on the risk assessed to the severity of the illness.

What does the billing administrator need to consider?

First, she needs to understand the situation. This is an example of health care fraud— something uncovered every day by ordinary employees going about their daily business. Health care fraud includes duplicate billing of tests and exams for Medicaid and Medicare patients. It also includes billing Medicaid and Medicare for treatment that is medically unnecessary.

When the billing administrator reports the fraud, she becomes a “whistleblower.” Qui tam actions are a specialized kind of lawsuit authorized under the False Claims Act. The False Claims Act makes it illegal to attempt to defraud the government by making false claims for payment. In a qui tam action, a private citizen files the lawsuit alleging the misconduct. The government is given an opportunity to join the lawsuit through intervention.

Second, the billing administrator should seek her own legal counsel. If the government is pursuing the claim under the False Claims Act, the government attorney has the government’s best interests in mind—not the whistleblower’s. A personal attorney can protect her interests and advise her appropriately during the investigation in to the fraud.

Unfortunately, sometimes there is a penalty for accusing someone else of defrauding the government. When the claim is investigated, the case can sometimes reveal that the accuser was also somehow involved in the fraud, whether directly or indirectly. David Benowitz, founding partner of the firm of Price and Benowitz, is an attorney experienced in client advocacy and is one of the top trial lawyers in the nation. This paragraph is true but I’m not sure we want to say it.

Importantly, health care fraud is not limited to false Medicare and Medicaid billings. Medical fraud can include pharmaceutical companies failing to disclose required information to the Food and Drug Administration. Pharmaceutical companies have also been caught failing to return Medicare rebates to the government and marketing drugs that are not approved by the Food and Drug Administration. Medical fraud also includes kickbacks to doctors in the form of free vacations or other perks for using a certain company’s medical device. Health care fraud also occurs when a medical device company markets one of its products for a use it is not approved for, such as marketing a surgical ablation device to treat atrial defibrillation.

The Department of Justice only intervenes in approximately twenty percent of False Claims Act cases, and the government wants to see a strong presentation of compelling facts when making such a decision. A good attorney is essential to winning the case.

Whistleblowers who uncover and report fraud are entitled to monetary compensation for the risk they take in exposing fraudulent practices. The False Claims Act protects whistleblowers from being fired or demoted by their employer as retaliation for reporting the fraud. Under the False Claims Act, persons who file qui tam actions are entitled to 15 to 30 percent of the government’s total recovery in the case. More than $40 billion has been recovered in cases of defrauding federal and state governments since the mid-1980s. The federal government alone has paid more than $3.8 billion to whistleblowers for their share in that time.