Healthcare fraud is a major problem in the United States, and the False Claims Act (FCA) may just be the most effective way to fight it. The vast majority of successful cases brought under the FCA involve healthcare fraud. This is due primarily to the government’s deep involvement in funding healthcare at every level.
According to the Medicare Trustees Report in 2018, the Medicare program covered more than 59 million people with total expenditures $ 740.6 billion. Massive as that amount is, it does not include the full scope of government programs that deal with paying for health care in the United States. Medicaid and Tri-Care Veteran’s benefits also pay money for the care of individuals. Individual government employees also, of course, have health care paid for with government funds.
Healthcare fraud hurts everyone, not just the government, by raising the cost of health care and diminishing its quality. If you work for an organization that submits bills to government programs such as Medicare or Medicaid, the False Claims Act gives you the ability to file a lawsuit against companies that engage in fraudulent activities on the government’s behalf.
People who report such fraudulent activities are known colloquially as whistleblowers, and successful whistleblowers are entitled to awards of anywhere from 15 percent to 30 percent of the amount recovered by the government. Many proponents and even some opponents of the law contend it has been very successful in uncovering health care fraud.
If you believe you have evidence of fraudulent billing or other forms of fraud related to the health care industry, an experienced DC False Claims Act healthcare fraud lawyer could assess your case and help you file the necessary disclosure statement with the government if you have a valid case.
Who Can Commit Healthcare Fraud?
Virtually any company involved directly with or close to the healthcare system can commit fraud against the government. Almost every imaginable program that deals with the government has been accused of some type of fraud. Numerous entities have committed health care fraud in the past, including nursing homes, laboratories, pharmaceutical companies, pharmacists, physicians, attorneys, billing companies, medical equipment suppliers, home health care agencies, hospitals and hospital chains, managed care organizations, rehab centers, consumers, medical transportation companies, and nursing home chains.
Types of Fraud
There are many different types of healthcare fraud. One of the most common types occurs when goods or services are not provided but the institution bills for them anyway. This includes but is not necessarily limited to:
- A physician over-compensates for the amount of hours spent visiting with patients
- A medical school claims to provide coverage by a paid professional when the services were actually provided by a resident
- A laboratory bills the government for tests or x-rays that it did not perform
- Pharmacies or doctors bill government programs for full prescriptions that are only partially filled
- A provider conspires with another company and agrees to pay higher-than-normal rates in order to establish a mutual benefit for both companies at the expense of the government
- Charging the government exorbitant or inflated prices for legitimate goods or services
- Providing unnecessary coverage—for example, if a laboratory were to perform tests that were not medically necessary
According to the U.S. Department of Justice (DOJ), qui tam cases where there has been an average recovery amount made by the government, generally around $8.6 million, will typically result in an award around $1.16 million for the whistleblower. Sometimes, the government will intervene in the case.
If the government does decide to intervene, a plaintiff’s chances of winning the case often increase significantly. They also avoid any burdens associated with the cost of pursuing civil litigation. Their False Claims Act healthcare fraud lawyer in DC could be key in helping them structure their claims in such a way that the government is likely to be persuaded to intervene.
In Medicare and Medicaid, the government provides the funds on behalf of the third-party beneficiary—the consumer of healthcare—and is not directly involved in supervising the use of those funds. The government merely approves payment based on what it sees as a bill to it for services provided to somebody else.
In healthcare cases, the contractual relationship between the government and a provider is therefore easier to enforce under the False Claims Act. It is much simpler for a healthcare fraud attorney in the District of Columbia to say that the government did not get what it paid for in healthcare cases, because nobody in the government’s job is to be sure—or even necessarily know—what the government did receive.
Medical Necessity Is Required
In order for any healthcare provider to charge a government program for services they must establish that those services are medically necessary. The point of the Medicare and Medicaid programs is to cover medical care. These programs are not designed to pay for and are not expected to pay for services which do not reach that standard. Medical necessity is an inherent requirement for all claims presented to the government under these programs.
That is why it is possible to sue when an institution regularly authorizes tests, which are not needed, or surgical procedures, which are not necessary for the care of a patient. Not only do those kinds of charges create fraud against the government, which is charged for these procedures, they also subject patients to potential harm from unneeded procedures.
Simply put, if the hospital or even a chain of hospitals is regularly billing for care without establishing that care is medically necessary chances are at least some of the bills they send out will be paid by a government program and will subject the provider to FCA liability. The majority of states also have their own False Claims Act laws, which create liability to the states for Medicaid payments when those payments are made for medically unnecessary care.
Generally speaking, medical necessity must be established as a condition of payment for government programs. Medicare regulations specifically state that they do not cover procedures that are purely cosmetic. The same set of regulations also requires documentation of the medical necessity to be kept by the provider. Therefore, when providers bill for care which they cannot establish as medically necessary, they can be held liable for healthcare fraud under the False Claim Act.
Each claim presented to the government includes at least some form of a certification that the care was medically necessary. If it turns out that care was not necessary, the certification is violated and it is relatively easy to establish that the claim should be held liable under the False Claims Act.
As such, providers will be subject to three times the damages caused to the government and civil fines for each false claim. If the medical necessity was said to exist, but in fact did not, that can create additional liability under the act for maintaining false records and providing false statements to the government as well.
Filing a False Claims Act Case
The world of FCA cases is divided into healthcare and non-healthcare related cases, even when considering the Department of Defense. There are several important reasons for this.
Medicare and Medicaid comprise a huge part of the federal budget, and it can be relatively easy to abuse the Medicare and Medicaid systems. To that extent, this is an opportunity to file False Claims Act cases and a good use of the law to help clean up an important government priority.
Additionally, healthcare cases involve a less direct contractual relationship between the federal government and the matters which affect virtually any other government agency. The fact is that with regard to almost every other agency besides Health and Human Services, including Defense, there is some government official guarding the government’s funds or approving the use of the government’s funds. That always complicates the filing of a False Claims Act case, whether a plaintiff retains a DC healthcare fraud attorney or not.
In addition, there are a couple of laws that have proven very helpful in bringing False Claims Act cases related to healthcare. The anti-kickback and Stark law require that healthcare providers not accept referrals illegally and not accept things of value to impair their medical judgment.
Unlike some regulations that could be repealed, become ambiguous, or be interpreted in different ways, these laws are relatively strong. The Stark law is particularly complex. Both the Anti-Kickback Statute and the Stark law include safe harbor provisions which may make what appears on the surface to be an illegal activity to be a safe one. However, they are strong laws reflecting the idea that business considerations are not supposed to override the medical judgment of practitioners and providers. Violating these laws confers almost direct liability under the False Claims Act, and so many major cases of healthcare fraud in the past few years have referred to these laws.
According to the U.S. General Accountability Office, in Fiscal Year 2014 the Medicare program will be required to cover more than 50 million elderly and disabled beneficiaries at an estimated cost of $595 billion. Massive as that amount is, it does not include the full scope of government programs that deal with paying for healthcare in the United States. Medicaid and Tri-Care Veteran’s benefits also pay money for the care of individuals, and individual government employees of course also have healthcare paid for with government funds.
All kinds of claims and all kinds of issues create liability for false claims under the federal and state False Claims Acts that a healthcare fraud lawyer in Washington, D.C. could help form a case around. One of the most likely areas of potential fraud involves claims for treatment which is not medically necessary.
How the FCA Fights Healthcare Fraud
It is simply not possible to violate this basic requirement of the Medicare program and also not create liability under the False Claims Act. Facilities that abuse the trust of the government by routinely performing unnecessary procedures or prescribing treatment for which there is no medical necessity will, sooner or later, find themselves on the wrong end of a False Claims Act case. The only reason to routinely charge the government for unnecessary procedures is to make more money.
These devious and deceptive tactics cause the government to waste money that should be spent on patients with legitimate health concerns. Also, unnecessary treatments may result in patients being subjected to a procedure or treatment which may actually be detrimental to their health. Therefore, fighting this kind of fraud with the False Claims Act is not only justified, but it may also be the best use of the law.
When it comes to filing a case, generally it would be under the Federal False Claims Act. If there are multiple states involved, it is possible to file a consolidated action of Federal and State law in Federal Court under the new amended False Claims Act, rather than individually, state by state.
The difference between filing a state claim and a federal claim is that there are several state-level False Claims Acts which only allow for a healthcare type of case and do not allow for collection under a more broad theory of fraud against the government. As a result, someone filing an FCA claim regarding healthcare fraud may only be able to sue for healthcare-related fraud paid for by that state’s funds.
The process can differ depending on the state, since healthcare has a lot of different aspects to it, and the billing for healthcare is particularly strict and involves a lot of documentation. For example, the Anti-Kickback Statute and the Stark laws restrict inducements to doctors to refer patients and inducements to healthcare providers to use particular products. So, there is a huge regulatory scheme and a huge set of regulatory laws that pertain to healthcare that create a potential for liability under the False Claims Act and which are specific to healthcare.
How a False Claims Act Healthcare Fraud Attorney Could Help
The continued and continual successful cases filed regarding healthcare under the False Claims Act tend to make everybody involved more comfortable with them and understand better how to proceed with such cases. An experienced attorney is an essential component of that success.
Private attorneys are familiar with cases where a drug company or a medical device manufacturer is selling defective products. They have seen these cases before and know the strengths and weakness of such cases. Experienced Washington, D.C. lawyers will also know the type of evidence they may need to collect.
In addition, the medical community is becoming increasingly aware that the False Claims Act is an effective way to fight fraud, and that filing a case is a good thing for an honest provider to do. As a result, many nurses, doctors, and even executives are more willing to come forward in this industry. When they do, one of the most important things they can do to help their case is retain the services of a False Claims Act attorney in DC with extensive experience in litigating healthcare fraud.