August 25, 2023. The False Claims Act is designed to prevent fraud against the government by imposing liability on those who knowingly submit false claims for government funds—and empowering private citizens to report fraud. Healthcare providers are susceptible to such violations due to the large amount of money paid out by Medicare and Medicaid. In 2018, BestCare LLC, a clinical laboratory, and its founder Karim A. Maghareh were found to have submitted false claims to Medicare and were recently ordered to pay a judgment of $5.7 million. By hiring a former employee of the laboratory, the whistleblower learned of BestCare’s billing practices. The whistleblower filed a lawsuit under the qui tam provision of the False Claims Act. For reporting Medicare fraud, the whistleblower will receive $1,311,000.
The legal case had a few twists and turns, with the whistleblower originally filing the lawsuit against BestCare in 2008, alleging that BestCare knowingly submitted false claims to Medicare for travel allowance reimbursements that grossly inflated the mileage lab technicians traveled when collecting specimens from Texas nursing home residents. As with all qui tam lawsuits, the lawsuit was filed under seal to allow the government to investigate the allegations and determine whether to intervene in the case. In 2011, the government partially intervened in the case. A first partial judgment was issued in 2014 for “unjust enrichment and payment by mistake,” followed by a 2018 final judgment for approximately $30.6 million. The defendant appealed but the United States Court of Appeals for the Fifth Circuit affirmed both the 2014 and 2018 judgments in 2019. This most recent judgment allows for the whistleblower to collect on the Final Judgment of 2018 and a 2020 Attorneys’ Fees Judgment, based on the Justice Department’s ability-to-pay policy.
How the fraud scheme worked: they took a detour into “reimbursement trickery,” but the road led straight to a dead-end called “consequences.” Medicare typically reimburses laboratories about a dollar per mile for their technicians’ travel, as long as the travel is for the purpose of collecting specimens from nursing home-bound or home-bound patients. This must be travel for the purpose of collecting specimens and not for logistical transportation of previously-collected specimens. According to the allegations, the lab submitted false mileage claims to Medicare for air freight shipping of specimens and for situations in which there was no travel involved.
As the the U.S. Attorney for the Southern District of Texas said, “When the greedy manipulate the Medicare system, it affects us all, especially the elderly. It’s a waste of resources meant to help those in need. This fraudulent scheme adversely impacted our healthcare system because of the inflated costs associated with transporting lab samples. This settlement brings to bear some economic justice, by requiring those that orchestrated the fraudulent scheme to pay for their actions.” Whistleblowers can be competitors, former employees, or anyone who has original knowledge that fraud against the government is occurring.
If you would like to report Medicare fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at www.fraudfighters.net.