A Medicare whistleblower settlement was recently reached with emergency care providers in the amount of $33 million over fraud allegations. This Medicare whistleblower settlement took seven years of litigation led by two doctors who worked in the emergency care sections of hospitals in Iredell County, N.C.

Under the terms of the Medicare whistleblower settlement, Envision subsidiary EmCare will pay $29.6 million to settle the numerous allegations of conspiracy to commit fraud. When combined with interest, EmCare’s payment under the Medicare whistleblower settlement will total over $33 million to federal and state authorities to completely resolve the qui tam investigation.

Overview of Medicare Whistleblower Lawsuit

The whistleblower lawsuit claimed physicians employed under EmCare had accepted financial incentives from Health Management Associates (HMA) to encourage or admit their patients to HMA hospitals instead of outpatient care.

After patients were admitted, doctors would reportedly order unnecessary medical testing that allowed high Medicare and Medicaid billings. It is important to note that in general, Medicare pays at least three times as much for hospital treatment compared to outpatient care.

Health Management Associates allegedly colluded with EmCare, with EmCare having over 500 contracts with emergency rooms at one point. These arrangements made between the two healthcare groups were based on EmCare physicians successfully getting patients admitted to HMA’s emergency rooms.

This Medicare scheme was eventually reported by whistleblowers Dr. Thomas M. and Dr. Steve F., who stated they were following their medical oaths and ethical reasoning when reporting the Medicare fraud. For their roles as whistleblowers, Dr. Thomas and Dr. Steve will receive over $6.2 million from the Medicare whistleblower settlement.

Lawyers involved in this Medicare whistleblower settlement are hoping the success of this case will encourage more whistleblowers to come forward to report instances of fraud to the federal government.

The Medicare whistleblower settlement was filed under the False Claims Act (FCA), which is a federal policy that allows individuals to sue companies on behalf of the federal government to recover lost taxpayer money from fraudulent billing claims. The FCA was first signed by President Abraham Lincoln during the Civil War, to help protect the federal government against fraud.

While it has been amended several times since it was first passed, this Act also provides protection for whistleblowers to prevent retaliation or harassment by the company being reported. On average, whistleblowers can expect to receive between 15% to 30% of whatever settlement is recovered from the litigation. It is important to note that whistleblowers must be the primary sources of information of the fraud, and cannot hear it from a secondary source.

Medicare and Medicaid fraud is one of the most prominent forms of billing scams the federal government faces, with scams involving:

• Fraudulent upcoding for medical billing
• Overcharging for medical goods or healthcare services
• Kickback or illegal referral arrangements between healthcare facilities
• Providing services that are unnecessary
• Claiming and billing for services that should have been provided by a physician, it was provided by a less qualified individual