Guardian Elder Care Holdings and its corporate divisions have settled a Department of Justice FCA lawsuit alleging Medicare fraud for $15.4 million. The company was accused of overbilling the Medicare and Federal Employees Health Benefits Programs for rehabilitation and therapeutic services deemed “medically unnecessary.”

Citizens Come Forward

The lawsuit was filed by two former employees, Phillip K. and Julie W., on behalf of the federal government under provisions of the False Claims Act, also known as the “Lincoln Law” or simply the FCA.  Specifically, the two whistleblowers (or in legal parlance, “relators”) claimed that Guardian had provided rehabilitation treatments to elderly patients that were far beyond what was medically necessary, billing Medicare at the highest rates. Guardian was also accused of employing two workers who had been excluded from federal health care programs and were reimbursed for ineligible services.

This was not only a case of alleged fraud; these actions also put the health and well-being of patients at risk. U.S. Attorney William McSwain of the Eastern District of Pennsylvania pointed out, “Too much rehabilitation therapy can actually harm patients, just like giving them too many pills or too much medicine.”  In addition, it harms taxpayers as well as those who depend on federal medical programs by depleting funding.

Guardian Elder Care operates facilities in Pennsylvania, Ohio and West Virginia.

About the FCA and Whistleblower Lawsuits

The concept of whistleblowing in the context of law is nearly as old as jurisprudence itself; for centuries, kings and rulers relied on their subjects to help protect the interests of society. In exchange for reporting violations and bringing allegations before a judge on behalf of these rulers,  those who brought the cases were rewarded for coming forward. The same is true today; if a whistleblower lawsuit is successful and results in recovery, the relator receives a percentage.

Modern U.S. whistleblower laws date back to the Civil War when war profiteers were discovered to have sold defective arms and sick draft animals to the Union Army. Today, many whistleblower complaints cite attempts to defraud the health care system in one way or another.

Milking the System?

Fraud involving state and federal health programs has reached epidemic proportions, according to the Department of Justice (DOJ).  A press release published in January reported that out of approximately $3 billion recovered in qui tam lawsuits during fiscal 2019, nearly 87 percent came from lawsuits over health care fraud.  For the past decade, the DOJ has recovered more than $2 billion a year from health care fraud.

Sadly, this problem is not unique to the U.S.  Research from the Centre for Counter Fraud Studies dating from 2014 found that across the globe, approximately $480 billion a year is lost to health care fraud.

Compensation and Protections for Relators

The FCA not only provides generous compensation for whistleblowers who bring legal action on behalf of the government, it also offers protection from possible retaliation by defendants. For coming forward, Philip K. and Julie W. will share in a $2.8 million reward, representing approximately 18 percent of the money recovered.

This article is not legal advice. It is presented
for informational purposes only.