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"ThumbnailAccording to a list published by
Taxpayers Against Fraud, during fiscal year 2014 (which ended on September 30, 2014), the Government
settled at least 136 cases under the False Claims Act.

I am a lawyer who represent whistleblowers, and whenever I tell people
about my job they want to know about defense contractor fraud. While certainly
there is too much fraud by contractors working with the Army, Navy, Marines,
Air Force, or Coast Guard, in fact the majority of all False Claims Act
cases are for
healthcare fraud. Of the 136 cases, 90 — more than 66% — were brought against
defendants working in the healthcare field.

Virtually every type of key player in the medical industry is represented
in the 90 cases settled in 2014. Doctors, hospitals, nursing homes, home
health agencies, pharmaceutical manufacturers and drug companies, and
even one billing/coding company, were accused of fraud against U.S. taxpayers
via Medicare, Medicaid, TRICARE, Champus, and other government-funded
healthcare programs.

These medical fraud cases settled for anywhere between a few hundred thousand
dollars to nearly $200 million dollars.

While the healthcare providers have wasted enormous creative energy on
devising schemes to defraud the Government, the schemes can be sorted
into about fourteen general categories. Several cases, perhaps most, involved
allegations of more than one type of medical fraud.

(1) Anti-Kickback violations. The statute makes it illegal for healthcare
companies or drug manufacturers to pay kickbacks in order to get business
referrals. Congress passed the statute when it realized that healthcare
costs were being inflated by what essentially amounted to bribery. Over
the years healthcare companies have experimented with ways to disguise
the bribes, but disguised or not, kickbacks continue to be illegal.

(2) Product liability. If a pharmaceutical or medical device manufacturer
knowingly or recklessly sells defective products for use in Medicare or
Medicaid or Tricare patients, it can be held liable under the FCA.

(3) Stark Act. For reasons similar to the ones that prompted the Anti-Kickback
statute, the Stark Act makes it illegal for a hospital or healthcare company
to cozy up financially with a healthcare professional that refers business
to the hospital.

(4) Unnecessary work. Healthcare providers do not own the license on billing
the Government for performing unnecessary work, but it is particularly
ugly when a hospital or doctor performs work on a patient who does not need it.

(5) Off-label marketing. Some of the largest recoveries under the FCA have
come against unscrupulous pharmaceutical companies that marketed their
drugs for off label uses.

(6) Failure to reimburse the Government. Sometimes Medicare or Medicaid
overpay. When a doctor or healthcare provider figures out that it has
been paid more than it should have been paid, it has a limited amount
of time to pay the Government back. After that period, the medical provider
becomes liable for failing to reimburse Medicare and Medicaid even though
it knew it had been overpaid.

(7) Overbilling. Doctors, hospitals, nursing homes, therapists or other
medical providers who overbill are stealing from the Government.

(8) Upcoding. Skilled nursing facilities, doctors, medical practices, etc.,
have been nailed under the FCA for upcoding — which means billing
for medical services that are more expensive than the services that really
were provided.

(9) Producing noncomplying goods or providing substandard services. As
with the category “unnecessary work,” this type of fraud is
particularly egregious in the healthcare field, because it can lead to
patient harm.

(10) Work not done (but billed, of course). This category is a classic
staple of False Claims Act cases in any field, including the medical field

(11) Inadequate supervision of medical employees or even a lack of supervision
of healthcare personnel. Again, this type of fraud can lead to patient
harm, which the Government takes very seriously.

(12) Using unqualified personnel to perform medical services. As a variation
on this theme, some providers have even claimed that a qualified doctor
or medical provider performed the service, when in fact someone else altogether
treated the patient. The reason for the falsification, of course, is that
the “someone else” was unqualified under Medicare regulations.

(13) Charging the Government more than other entities are charged, or failing
to give the best price to the Government. Drug stores and pharmaceutical
companies that sell to the Government promise to give the Government the
best price they give to anyone else.

(14) Unbundling. Medicare assigns a code to each unique type of medical service.

Over my next few legal blog posts, I will start unbundling (!) these fraud
cases, talking about some of the specific examples of each type of False
Claims Act medical fraud case that settled in 2014.


Lee’s peers have named her a Georgia SuperLawyer every year for two decades.