Vascular Access Centers has agreed to pay $3.825 million over five years after whistleblower lawsuits claimed that it committed Medicare billing fraud by inappropriately billing Medicare for medical procedures and engaged in a referral related kickback scheme.

Vascular Access Centers (VAC) , a group comprised of 23 subsidiary and related corporations, operates in California, New Jersey, Mississippi, Louisiana, Pennsylvania, Tennessee, Maryland, and Florida. It specializes in care for patients with end stage renal disease (ESRD). Its providers perform a variety of surgical procedures on ESRD patients, including fistulagrams and percutaneous transluminal angioplasties.

The allegations against VAC included claims that the corporation billed Medicare for procedures that were performed without proper documentation showing that the procedures were medically necessary for the patient.

In addition to the alleged Medicare billing fraud, the suits leading to this settlement alleged that the procedures were the result of referrals that were improperly obtained. They were allegedly obtained through a kickback scheme giving compensation to physician investors and medical directors in exchange for referring patients to VAC.

If true, this arrangement would be a violation of the Anti-Kickback Statute, which is meant to prevent the judgement of medical physicians from being influenced by financial motivations, rather than the needs of their patients.

The allegations resolved by this settlement were originally raised in two qui tam lawsuits. The qui tam provision is part of the False Claims Act and allows for individuals to sue on behalf of the government for fraud committed against the government.

Qui tam lawsuits, also called whistleblower lawsuits, typically result in the whistleblower receiving 15 to 30 percent of the sum of any settlement obtained. The whistleblowers for this Medicare billing fraud suit are expected to collectively receive at least $612,000.

Qui Tam Lawsuits and the False Claims Act

The qui tam provision of the False Claims Act is meant to encourage whistleblowers to speak up without hesitation if they have evidence of fraud being committed against the government. The first whistleblower to file a qui tam lawsuit will be the one eligible to receive part of the payout, even if later lawsuits contain more information. Filing a whistleblower lawsuit is the only way to be eligible for a cash payout from any resulting settlement. Calling and reporting fraud directly to the government will not entitle an individual to a reward beyond a small amount.

Who Are Whistleblowers?

Whistleblowers are often employees, former employees, or competitors who have inside knowledge regarding possible fraud. Whistleblower lawsuits cannot be based on public information. The whistleblower must be the original source of the information. Fraud can take many forms, and be found in many industries, including Medicaid or Medicare billing fraud, government contractor fraud, stock fraud, tax fraud, and more.

Protections for Whistleblowers

The Justice Department reviews the claims cited in whistleblower lawsuits for validity and decides whether the government will join the lawsuit. These lawsuits are kept confidential during this process, which, without an extension, can last up to 60 days before the government must inform the corporation being charged. During this process, the name of the whistleblower is also kept confidential, and in cases regarding securities fraud, the name is usually never disclosed. There are also laws in place to protect whistleblowers. The U.S. False Claims Act, state False Claims Acts, IRS, and SEC statutes have provisions that provide whistleblowers with protections against retaliation. Retaliation can include being fired, demoted, or harassed.