Healthcare is big business in the United States, with costs approaching 18 percent of the country’s gross domestic product. Government healthcare programs make up a hefty portion of these costs, with Medicare and Medicaid alone insuring nearly one in three Americans (over 100 million people).
The large amount of money at stake in the healthcare industry makes it a field day for fraudsters with up to 10% of government healthcare spending lost to fraud. The government cannot possibly ferret out all of the fraud by itself, which is why courageous whistleblowers, with assistance from a skilled healthcare fraud attorney, have been the driving force behind the government’s successful prosecution of healthcare fraud.
Although much of the focus is on Medicare and Medicaid, whistleblowers with a healthcare fraud attorney can bring False Claims Act suits for all government-funded healthcare programs, including the TRICARE (military), Federal Employee Healthcare Benefits, and Veterans Administration programs.
If you are considering bringing
Just about anyone in the healthcare arena can commit fraud
A dizzying array of people and entities can commit healthcare fraud. Whistleblowers who contact a medical fraud attorney can expose them via a False Claims Act complaint.
- Healthcare facilities, including hospitals, clinics, long-term care facilities, inpatient rehabilitation facilities, and laboratory/diagnostic testing facilities
- Healthcare providers, including physicians, therapists, and hospice providers
- Pharmaceutical organizations, including retail, compound, or long-term care facility pharmacies, pharmaceutical manufacturers and distributors, and medical device manufacturers and distributors
- Government contractors, including group purchasing organizations, Medicare Advantage Plan providers, and electronic health records software providers
Types of healthcare fraud
Anti-Kickback Statute (AKS) violations
An example of an Anti-Kickback Statute violation is when a hospital refers patients to a provider, or a provider prescribes a certain medication, in exchange for some form of compensation, such as cash, trips, etc.
Kickbacks can be very creative, so the question is whether a provider is getting something for nothing that may be influencing their medical decision-making.
Stark Law violations
An example of a Stark Law violation is when a doctor refers patients to a facility that she owns unless a “safe harbor” exception applies. Understandably, a doctor who makes money with every referral is likely to make more referrals, resulting in unnecessary procedures. The Stark Law prevents that from happening. Contact a healthcare fraud attorney if you suspect a Stark Law violation.
One of the most common False Claims Act violations, upcoding occurs when the facility or provider fraudulently bills the government using incorrect billing codes that result in a higher reimbursement than the correct billing code.
For example, a surgeon who performs a simple procedure but bills for an expensive, complicated surgery; a dentist who pulls one tooth but bills for three; a hospital that submits a false diagnosis that pays more; or an ambulance company bills a routine transport as emergency services.
Billing for medically unnecessary services
Examples of this type of False Claims Act violation are a doctor billing for cancer treatments for a patient who does not have cancer; a facility admitting patients who do not meet admission criteria, or a pain management doctor who over-prescribes procedures and medications.
Bundling and unbundling
“Bundling” occurs when a provider bills the government for a panel of tests or procedures when only a single test or procedure was performed. “Unbundling” occurs when instead of billing for a single code that includes all the services provided, a provider breaks the billing up into separate codes to increase their reimbursement.
Billing for services not rendered
An example of this type of false claim is the doctor who fraudulently bills the government for the impossible feat of 70 half-hour patient visits in a single day or the practice that routinely tacks on a certain billing code without performing the associated procedure because they know it will always be paid.
Falsified cost reporting
Hospitals submit annual cost reports to the government, which in turn affects how much Medicare will reimburse its patients. A hospital that knowingly submits a cost report with incorrect data resulting in additional government reimbursement may be liable for a False Claims Act violation.
An example of a False Claims Act case based on false certifications is when a provider certifies that it has performed certain prerequisites or that the patient has certain conditions that qualify them for a procedure. Another standard certification on every Medicare claim is that the provider did not provide a kickback for the referral in violation of the Anti-Kickback Statute.
In this type of False Claims Act violation, the government is billed for a service, treatment, test, device, or drug for a non-existent patient or a patient who never received the service or item.
Use of non-approved products
Providers may try to earn an extra buck by using non-approved or adulterated products, such as drugs and medical devices imported from foreign countries, but billing for the regular product. This not only is clear-cut billing fraud, but it puts patients at risk.
Incident to or split/shared billing fraud
Medicare permits midlevel providers (nurse practitioners and physician assistants) or staff to perform certain services and have them billed under a supervising physician, which pays a higher amount. But if there is no physician present or they are not involved in the patient’s care, such billing may be fraudulent.
Off-label marketing happens when pharmaceutical companies market their drugs to doctors for non-indicated uses, usually to increase drug sales. False claims result if this marketing causes doctors to submit claims to the government for these off-label drug uses. A Medicare fraud whistleblower can help reduce the hundreds of millions of dollars of fraudulent submissions to Medicare and Medicaid.
“Best price” fraud
These false claims arise from the violation of Medicaid rules requiring pharmaceutical manufacturers to give the government the lowest price for any purchaser. Ways that pharmaceutical manufacturers commit fraud include concealing the actual best price or by pricing deals between pharmaceutical companies and favored customers, such as chain drug stores.
“Marketing the spread”
By fraudulently inflating the price of a drug so Medicare and Medicaid over-reimburse for a drug, a pharmaceutical manufacturer can “market the spread,” i.e., promote the difference to a pharmacy. That pharmacy now has a financial incentive to dispense that drug versus its competitors. This is a violation of the Anti-Kickback Statute and should be discussed with a healthcare fraud attorney.
Compound drug fraud
Compounding pharmacies prepare unique prescription drugs to meet the needs of individual customers. For example, if an elderly patient is unable to swallow, a compound pharmacy may crush her pills into a paste.
One example of this type of fraud is when the compounding pharmacy markets to patients who do not need the specialized formula, which can result in both unlawful kickbacks and prescriptions that are not medically necessary.
Generic drug substitutions
Pharmacies sometimes dispense a generic drug in place of the brand name drug on the patient’s prescription to get a better reimbursement rate from the government. Billing government healthcare programs for these substituted drugs can violate the False Claims Act.
Defective medical devices
Sometimes medical device companies allow a medical device that they know or have reason to believe is defective to be put on the market. Government healthcare claims submitted for these defective devices may result in False Claims Act violations.
Fraud on the FDA
Medical device companies may be liable under the False Claims Act for lying or omitting information the FDA requires to approve their medical devices.
Our Healthcare Fraud Whistleblower Attorneys Serve Clients Nationwide
Our False Claims Act lawyers can appear and represent whistleblowers in every state in the country – but let’s unpack this a little bit.
First, nearly every government-funded healthcare program is at least partially funded by federal money. This includes state Medicaid and Medicaid managed care organizations (which is like the Medicaid version of Medicare Advantage). The amount of federal funding varies by state, but at least half of the program is paid for by the federal government.
Accordingly, most healthcare cases can be filed in federal court under the False Claims Act. And as we explain below, if you can file your qui tam case in federal court rather than state court, it is usually advisable to do so.
We come to you
We can be admitted to every federal court in the country in one of two ways. First, just because Jason and Julie live in Georgia does not mean they cannot be admitted to practice in other districts. For example, they are permanently admitted to practice in federal courts in Colorado, Michigan, and Tennessee.
Other courts only let local attorneys become permanent members, but they can grant special admission to out-of-state lawyers to enter an appearance on a case-by-case basis (making an appearance pro hac vice).
No charge for local counsel
In those instances where we appear in courts outside of Georgia, we usually bring on an additional law firm to act as local counsel. These are attorneys that more regularly practice in the geographic area and so have better knowledge of the judges and local rules that we will be operating under.
When we decide to incorporate local counsel, it is no charge to our clients; they share in our fee. So, our clients benefit from the False Claims Act expertise of our firm as well as the additional experience and manpower of our local counsel.
In addition to the federal False Claims Act, some states have their own Medicaid False Claims Acts. Although these statutes permit you to file the case in state court, this is rarely the best decision.
For one thing, federal courts have far more experience with the False Claims Act than do state court judges, and the law is more established in federal courts.
For another, as we explain in our FAQ on how whistleblowers are paid for bringing successful Medicaid fraud cases, you have to file a claim under the federal statute to get paid for the recovery of the federal portion, and you have to file a second claim under the state statute to get paid for the recovery of the state portion.
In federal court, you can file both the federal claim and the state claim. Not only are you ensuring twice the resources – the federal U.S. Attorney’s Office and the state Medicaid Fraud Control Unit – but you also are then eligible for the largest possible relator’s share.
Non-Medicaid state healthcare fraud
If none of the funding comes from the federal government or the Medicaid program, then the state must have a more general False Claims Act that encompasses non-Medicaid fraud.
Georgia, for example, has a second state False Claims Act to address fraud, waste, and abuse of all state and local funds besides Medicaid. These statutes tend to go well beyond healthcare fraud, including funds meant for education, transportation, infrastructure, and other state-funded projects.
To file a lawsuit under one of these statutes without any federal False Claims Act tie-in, you have to file the lawsuit in state court, usually in a county where at least one defendant resides, transacts business, or commits fraud.
False Claims Act cases are so rarely brought in state court that it is likely the assigned judge will have no experience with the statute. That is why it’s vital to have experienced whistleblower counsel that can educate the court on the issues.
How long does it take to be rewarded for a healthcare fraud case?
Unfortunately, there is no telling how long a government investigation into healthcare fraud will take. So many variables factor into how long a case might take that it is impossible to predict, even for experienced healthcare fraud attorneys like us.
When pressed, we find that a straightforward case may be intervened and settled after approximately 2-3 years, while large or complicated matters may take longer. Of course, if a case is determined to not be viable that may occur in a far shorter period of time.
If your reaction is shock and dismay at how long these cases take, let’s discuss further why this is so.
The initial seal period is for 60 days, but unless your case has zero merit, the government is certain to seek an extension. Usually, it requests a six-month extension to continue its investigation.
Good cases aren’t open-and-shut
Good cases can often take a very long time to investigate. Mountains of evidence may be produced, all of which need to be processed and reviewed.
Even seemingly simple cases can require a file-by-file review to determine which patients were subject to the fraud and which were not. It is not enough to say that fraud occurred generally, but rather, the government must prove exactly when, where, and how it occurred, and to what extent. There is much to do, and the government wants to dot its I’s and cross its T’s before the case is unsealed.
If the government concludes its investigation and intervenes, there is no telling how long a settlement will take, if there is to be a settlement.
First, the government must disclose the existence of the case with the defendants. Remember, although the whistleblower and government have been tirelessly working on this case for years, because of the federal seal, it is only once the investigation is complete that defendants often learn they are being investigated in the first place.
Once the defendant wraps its head around the fact that it is the subject of a major lawsuit and complex government investigation, it must retain counsel, review the allegations, and prepare its defense.
The government wants to hear the defendants’ justifications now, not later, and sometimes it turns out the defendant had a very good – and legal – reason for doing what it did. This process can take many months.
If the government is unconvinced, a defendant may decide to settle. If that happens, that process can take many months as well, as the parties hash out not only the exact dollar amount to be returned to the federal fisc but also many details of the settlement, such as:
- Timing of payments
- Release language
- Conduct covered by the settlement
- What part of the settlement might be tax-deductible
If a defendant does not have enough money to pay back the government what it thinks it should settle for, it can request an “ability to pay analysis.” This is yet another lengthy process, and discussions are essentially shut down while the defendant gathers its financial information and prepares sworn affidavits as to its solvency.
Often, the affected agency requires something called a Corporate Integrity Agreement to ensure that the defendant does not continue to commit fraud. In the case of Medicare fraud, for example, the Department of Health and Human Services may request annual audits, training, license suspensions, and other requirements as a condition of settlement.
This negotiation frequently takes longer than the settlement itself, as Corporate Integrity Agreements can be expensive and burdensome.
How trial affects the timeline
If the case is litigated, there is no telling how long that will take, either. Certain motions – which are routinely filed in False Claims Act cases – can take months for the court to rule on, all the while the litigation is at a standstill.
Needless to say, litigating a False Claims Act case to successful completion is likely to take years, although a settlement could occur at any point in the process.
The last step: Whistleblower negotiations
Once the settlement or judgment is complete, the whistleblower still must negotiate a realtor’s share with the government. As discussed on our page “How are Medicare whistleblower rewards paid?”, realtors are generally entitled to between 15 and 25% for an intervened case, and between 25% and 30% for a declined case.
If the whistleblower can reach an agreement with the government, then it is just a matter of processing the payment. If not, then the parties must go to court and litigate the issue.
A similar problem occurs if there are multiple cases alleging similar facts. Under the False Claims Act, only the “first-to-file” of a certain claim is entitled to an award. But whether a certain relator is first-to-file is not always obvious. Did he name the same defendants? Are states involved in the settlement? Are claims the same? It is rare that cases perfectly overlap so that the answer is clear.
Unfortunately, litigating first-to-file issues can easily tie the money up for months, if not years, as the court is in no rush to resolve these questions and the government is unwilling to pay even a dime until it knows who is entitled to the money.
A healthcare fraud attorney is ready to help
Whether you are in the contiguous 48 states, Hawaii, Alaska, or even Guam or Puerto Rico, we can handle your federal or state healthcare fraud case for you. Please call us at (770) 988-5035 today.