Qui Tam and Health Care Fraud

Health care 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, qui tam laws give 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. 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 qui tam attorney can assess your case and help you to 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 health care 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.

Contractual Relationship

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 to be able 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.

Types of Fraud

There are many different types of health care fraud. One of the most common types of health care fraud occurs when goods or services are not provided and 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, someone’s chances of winning the case increases significantly. They also avoid any burdens associated with the cost of pursuing civil litigation. Their healthcare fraud whistleblower attorney is key in helping them structure their claims in such a way that the government is likely to be persuaded to intervene.

Unique Aspects

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, in state law, there are several State False Claims Acts which only allow for a healthcare type of case and do not allow for a collection under a more broad theory of fraud against the government. As a result, someone filing Qui Tam claims regarding healthcare fraud may only be able to sue for healthcare related fraud paid for by that state’s funds.

Depending on the state, the process is different because 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 prohibit certain kinds of activities. They 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.

Filing a False Claims Act

The world of Qui Tam cases is divided in 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 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.

Relevant Legislation

In addition, there are a couple of laws that have proven very helpful in bringing False Claims Act cases in health care. 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.

Those laws, unlike some regulations that could be repealed or become ambiguous, or interpreted in different ways 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 health care fraud in the past few years have referred to these laws.

How An Attorney Can Help

The continued and continual successful cases filed regarding healthcare under the False Claims Act tends to make everybody involved more comfortable with them and understand better how to proceed with such cases. An experienced attorney is an essential key to 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 lawyers will 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 to do for an honest provider.  As a result nurses, doctors 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 an attorney with extensive experience in the field.