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Blowing The Whistle On Health Care Fraud

Government funding of healthcare — primarily through the Medicare and Medicaid system — has led to a large number of qui tam whistleblower lawsuits being brought against hospitals, doctors, pharmaceutical companies, or makers of durable medical equipment (DME), exposing healthcare fraud in the industry. In fact, over the past 20 years or so, approximately 70% of the money recovered by the federal government in False Claims Act cases has been in cases alleging healthcare fraud. And of that amount, about three-quarters has been the result of cases brought by qui tam whistleblowers.

Some of the types of healthcare fraud that have been the subject of qui tam whistleblower cases include upcoding or unbundling, the unlawful paying of kickbacks to doctors or hospitals, off-label marketing by pharmaceutical companies, or falsification of medical records.

Upcoding is a form of fraud that occurs when a hospital or other healthcare provider delivers a particular service to a patient, but uses a more expensive code when billing for the service. Another similar form of fraud is unbundling, in which certain groups of related services or supplies should be billed under a single code in accordance with government regulations, but instead are billed separately so that the provider obtains higher reimbursement.

Kickbacks involve the giving of money or other financial incentives (such as gifts) to doctors or hospitals in exchange for referrals or for the prescription of particular pharmaceuticals or DME. There are a number of laws that generally prohibit this — they are intended to assure that doctors and other healthcare providers make decisions for their patients based solely upon medical necessity, and not because of some unlawful financial gain — and violations of these laws can result in fraud.

Off-label marketing involves the promotion of pharmaceuticals or medical devices for uses that have not been approved by the U.S. Food and Drug Administration (FDA), which leads to the submission of improper claims to the Medicare and Medicaid systems. (Medicare and Medicaid regulations stipulate that reimbursement for pharmaceuticals and medical devices is only available when those pharmaceuticals or devices are used in the manner approved by the FDA.) Some of the largest qui tam cases ever — including some cases that have settled for more than $1 billion — arose out of this particular type of healthcare fraud.

Falsifying medical records is also a form of healthcare fraud, as Medicare and Medicaid will only reimburse a provider for services if they are deemed medically necessary. Providers are required to maintain various forms of documentation, such as doctors’ orders or notes, to demonstrate this medical necessity. If a provider either falsifies those records, or fails to maintain them as required by the regulations, then the provider may be committing fraud when it submits claims for payment to the Medicare or Medicaid system, and a qui tam case may be brought.

The healthcare system is very complex, and these are very technical issues. Our firm has handled many claims involving various types of health fraud, including qui tam cases alleging fraud on the Medicare and Medicaid systems. We understand the complexities of federal healthcare funding, and how to cut through those technicalities to help our whistleblower clients explain their cases to the government.