In February, CMS released data identifying what different healthcare providers were billing to Medicaid. CMS has been doing this with Medicare data for many years, and this was the first time it was releasing the same information for Medicaid. The data shows provider billing from January 2018 through December 2024.
CMS stated that its reason for releasing the data was to “crush fraud, waste, and abuse” of healthcare spending. It invited whistleblowers and data miners to comb the data looking for outliers and “impossible billing,” while simultaneously the federal and state governments began cracking down on supposed Medicaid fraud.
The data miners heard the call, and they responded. Recognizing that there was a significant opportunity, but also that the False Claims Act only rewards the first person to file a lawsuit, they have jumped into action.
There are Difficulties Associated with Data Mining Medicaid Fraud
But Medicaid fraud and PPP fraud are not the same. When someone filed an application for PPP money they were not entitled to, the liability was clear (they received a loan they should not have) and the damages were clear (the amount of loan forgiveness).
Medicaid fraud cases come with numerous hurdles:
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Different states have different laws and regulations.
We recently announced a settlement with an infusion center regarding non-nurses performing infusions. This conduct would have been legal in Florida. Some states let doctors bill for everything that is performed by their staff (which makes it look like they are performing an impossible amount of work) and some states do not. Some states have private companies called Managed Care Organizations that make up their own rules that are different from the state’s rules.
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Damages are limited to just the improper billing.
If a doctor is performing a certain procedure on half his patients, but billing that procedure for all of his patients, the damages are just the billing on the second half of patients. That means going in and looking at every patient record and seeing what the doctor did and didn’t do for each, records that are sometimes hundreds of pages long. This is not an easy task for the Government.
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Not every state has a False Claims Act.
Medicaid is partially funded by the federal Government and partially funded by the individual states. If the state has its own FCA, you receive a relator’s share of the entire recovery. If the state does not have its own FCA, you only receive a realtor’s share of the federal recovery. In that instance, if the state pays half of each Medicaid dollar, the relator’s share would only be awarded on half of the recovery.
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Outliers do not automatically equate to fraud.
One year, we had different clients bring to us two cases of “outliers,” i.e., doctors billing at extremely high rates that made it likely they were committing fraud. One of those clients was right, having identified a doctor in north Georgia who was billing an unusually high amount of chelation (a treatment for lead poisoning), which resulted in a $27 million jury verdict. One of those clients was (probably) wrong, having identified a doctor in north Georgia who was billing an unusually high amount of burn treatments, not realizing that the country’s largest burn center was in the area.
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Some codes that seems to require certain amounts of time don’t actually do that.
Some codes are to be used for certain lengths of time, i.e., for each “unit” of 15 minutes a service is provided, you bill this code. This causes people to add them up as if every time the code is billed, 15 minutes has been spent with the provider, which can result in impossible billing. However, some codes include time spent before and after a visit and/or time spent with the nurses. For example, imagine you walk into a visit, you get weighed, you tell the nurse about your symptoms, she writes down a medical history, the doctor comes in and speaks to you for five minutes, and then you leave. You might be furious if you got a bill for a 30-minute visit. But some codes let providers include the time spent by the nurse, time spent reviewing your notes, and time spent recording the visit after you leave. Moreover, some codes suggest that a visit should take 30 minutes but don’t require it to take 30 minutes.
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Lots of people, including the states and federal government, are doing the same thing.
As previously mentioned, the False Claims Act has a First to File bar that limits a relator’s share to the first person to bring a case. The suit can be brought by another relator or it could be a civil suit or administrative civil money penalty proceeding brought by the government, the latter of which you may not even be aware of. And the Government can decide to dismiss you and refuse to pay you a relator’s share if it is already investigating the case that you brought.
These are just some of the issues we see with datamined healthcare cases. If you want to be the next DOGE hero, it is important that you review the regulations and make sure what they are doing is actually improper.