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Medicaid: Overview
Medicaid programs are state-run health coverage options that are administered based on each state’s needs and goals. These programs are funded by both state and federal governments.
Because Medicaid is on a state-by-state basis, eligibility will depend on the state someone lives in. Patients can check their eligibility by contacting their state’s Medicaid agency or by applying.
After people apply for Medicaid, they will be given their state’s coverage if their application is accepted. They can then use their state resources to seek healthcare within the provider network.
Medicare is slightly different from Medicaid because it is offered by the federal government as opposed to individual state governments.
Medicaid Legal Issues
Often times, Medicaid comes into play during whistleblower lawsuits. These complaints, sometimes called “qui tam” lawsuits, are filed under the federal False Claims Act which prohibits behavior that defrauds the federal government.
Medicaid fraud may include:
- Billing for unnecessary services
- Billing for services that were not provided
- Unbundling (billing for a group of procedures individually rather than under one code)
- Upcoding (billing for a higher level of service than what was provided)
- And other actions which result in fraudulent claims to a Medicaid program
If a pharmacist, doctor, or other professional commits Medicaid fraud, they are in violation of federal law. In these situations, “whistleblowers” can file a lawsuit on behalf of the federal government if they have witnessed fraud. Whistleblowers are often current or former employees of an offending organization.
Medicaid Fraud Whistleblower Lawsuits
Several lawsuits have been filed by whistleblowers and directly by state attorneys general and the U.S. Department of Justice.
In March 2019, the Department of Justice announced that they had reached an $18.6 million settlement to resolve allegations in a False Claims Act lawsuit. The whistleblower who brought the lawsuit claimed that five different nursing home facilities submitted false claims to the Tennessee Medicaid program. The false claims allegedly included forged signatures. The qui tam complaint also included allegations of nursing home abuse.
In April 2019, the Department of Justice accused numerous providers, pharmacists, and other professionals who allegedly committed Medicaid fraud by increasing drug costs. The defendants were also accused of defrauding Tricare with their scheme.
Dr. Christopher Nelson, the accused ringleader of the scheme, allegedly partnered with pharmacy Assured Rx to increase the price of pain drugs. Nelson allegedly earned $225,700 in illegal profits over five months in 2015. From July 2015 to January 2016, the doctor allegedly earned an additional $282,000 in illegal kickbacks.
Nelson reportedly furthered his scheme to pay bonuses to nurse practitioners and physician assistants at his Bluegrass Pain Consultants office.
In June 2019, two providers from Massachusetts agreed to pay over $10 million to resolve Medicaid fraud claims against them. Avenue Homecare Services Inc. will reportedly pay $8.3 million for the settlement while Amigos Homecare LLC will need to pay $2.1 million.
The providers were charged by the state’s attorney general who claimed that they “defrauded the state and diverted vital resources from elderly and disabled patients…in both cases, the AG’s Office alleges that these health care companies billed for services for which they did not have valid, signed plans of care.”
