The False Claims Act, 31 U.S.C. §§ 3729–3733 enables private individuals to alert the government to fraud, including healthcare fraud—and then also get a share of any recovery that might occur from the government obtaining a settlement or a judgment for that healthcare fraud.
This is complicated and we would never recommend anybody try to do it on their own because the statutory scheme and procedures are extremely technical and complicated. The individual brings the suit in the name of the federal government. If, for example, you were bringing a healthcare-fraud suit against Dr. Smith for billing for services not rendered then you would bring that suit as, “United States of America, ex rel. [Whistleblower’s Name] v. Dr. Smith.” It's filed in the name of the U.S. government, which the False Claims Act permits. (These are also called qui tam suits, which means “in the name of the crown.”
Once the complaint is developed, filed, and fully investigated, the federal government takes over through the local U.S. attorney's office, or the U.S. Department of Justice in Washington, D.C. They will start investigating the allegations in the complaint, ask for any evidence the claimant has (possibly interviewing the whistleblower). This can take many months. In fact, depending on the complexity of the matter, it can take years for them to complete an investigation.
The False Claims Act also includes a provision against retaliation. If a current employee blows the whistle or opposes healthcare fraud, and then that individual faces retaliation—including being fired for blowing the whistle—then there's a separate cause of action for False Claims Act retaliation that we can bring on a client’s behalf.
What constitutes a false claim regarding healthcare?
Defining what constitutes a false claim regarding healthcare can be complicated. The cleanest way to think about it is, a false representation being made by a healthcare provider to the government that results in money improperly going out of government coffers and into the pocket of the person that made the misrepresentation, or to somebody else. For example, imagine that a physician is billing for services that weren't rendered at all. If it’s a genuine accident in billing, then that’s not a false claim because unintentional mistakes do occur. But, if there’s a pattern then the idea that it was just a mistake comes across as an excuse. It’s going to be a false claim because a false claim has to be a knowing act.
What are the common healthcare scams or fraud cases that you see?
The most common healthcare fraud we see would be billing for services that weren't rendered—phantom patients for example. If you saw patient John Doe on March 30th but patient John Doe doesn't exist in your practice or patient John Doe came in the previous month but didn't come at the time you were billing for services.
Another example of healthcare-fraud schemes that interests the government is upcoding. There is a coding manual defining how particular patients’ types of service are supposed to be billed. For example, if it’s a 30-minute exam then there's a specific charge Medicare allows for that. But if a particular doctor seeis the patient for only 30 minutes, and charges for 60 minutes for a higher payment code, that's called upcoding.
The same is true for the billing of items. For example, if there is a particular medical device that is actually given and yet there a charge for an item that is more expensive—that’s upcoding too.
We also see what’s called unbundling of services. This is where there are particular services rendered by physicians that in the standard codes are supposed to be billed together, at a discount, but a physician starts charging for them separately. If it's happening as a pattern that the government can identify, they come down pretty hard on it.
Another example is where medical practices submit duplicate claims; they’re billing more than once for the same service.
Another example is excessive services or a situation where something is not medically necessary and yet a medical professional is providing it anyway. It might be unnecessary, excessive, or they performed a much more expensive procedure when something less expensive was available.
One of the schemes I've handled as a federal prosecutor is a kickback scheme where a payment is exchanged for referrals. For example, physician A refers to physician B who does a particular type of treatment and then physician A gets some sort of kickback for the referral.
The idea of a “finder's fee” in medicine is strictly, ethically, and legally prohibited. It’s a criminal act in the medical field because the theory is that if kickbacks are allowed then there's a greater risk of harm to patients and unnecessary services being rendered because physicians won't be pure of heart in thinking about how they’re going to refer somebody out for care. It also adds to the overall cost of healthcare. In their modern incarnation, kickback schemes are often thinly disguised. One of the kickback schemes that I personally prosecuted (resulting in about two dozen convictions) was a situation where laboratories were providing kickbacks to physicians, chiropractors, and podiatrists in return for referrals thinly disguised as “rental payments.” The amount being paid for the use of an office once a month or twice a month was a huge amount. You wouldn't have expected to see thousands of dollars changing hands if that was a legitimate bonafide rental payment.
An area in which the federal government is engaged in increasing healthcare-fraud scrutiny is telemedicine, where physicians provide services remotely by telephone or video and authorize prescriptions, referrals, or durable medical equipment (DMEs). The government has indicted telemedicine cases and secured convictions amid allegations that the services are not genuine or authorized by law; prescriptions, referrals, and DMEs are not medically necessary, and that the fees paid to physicians are kickbacks.
The government also investigates situations where medical records appear suspicious to it because there seems to be a replication of data from across multiple records. Investigators suspect providers are copying and pasting the same information into an electronic medical record to justify a service that probably wasn’t rendered—and then billing on a mass scale.
For more information on the False Claims Act and Healthcare Fraud, please call our office today at (216) 578-1700 and speak with one of our intake specialists, or fill out our online contact form.