Medicare fraud cases hurt more than just the bottom line. Important resources that should go to legitimate caregiving end up stretched too thin, and perpetrators of such fraud need to be held accountable.

What is Medicare Fraud?

Medicare fraud is a federal crime that costs taxpayers billions of dollars and drags down the efficiency of the health care system. Medicare and Medicaid programs rely upon every doctor’s judgment regarding proper and necessary medications and services prescribed to each patient.

Unfortunately, there are doctors who abuse that trust by filing false claims or committing other fraudulent activity that impacts these important programs. Whether a health care professional is motivated by his own financial, personal or corporate gains, Medicare fraud places the needs of honest beneficiaries at risk.

The Centers for Medicare and Medicaid Services say Medicare fraud cases usually include one of the following circumstances:

The health care provider knowingly submits false claims or makes misrepresentations of the circumstances to receive a federal health care payment that would not have otherwise been paid. Some health care provider knowingly solicits or agrees to pay or receive money to encourage or reward referrals for medical products or services that will be reimbursed by Medicare, schemes also known as bribes or kickbacks.

Other shenanigans involve billing for services at a higher level of complexity (and a higher reimbursement rate) than the services that were actually provided to the patient, which is often referred to as upcoding.

Some unscrupulous health care providers bill Medicare and Medicaid for appointments that were not kept or they invoice federal and state programs for services or medical devices that were not actually supplied or delivered.

Much of health care fraud happens within the billing departments of nursing homes, assisted living facilities, hospitals, hospice care and home health care.

Sometimes a health care professional will visit an institution such as a nursing home where they may see a half dozen residents, but then submit a bill to Medicare as if most of the residents received care that day. This type of fraud is known as a “gang visit” because the doctor claims he treated the entire gang of residents.

Medicare and Medicaid fraud is so difficult to discover that many times an employee or someone who works closely with the perpetrator blows the whistle on the fraudulent activity. These whistleblower actions often place the employee at riskof losing their job or facing other illegal types of repercussions, and the whistleblower may be rewarded in court with a handsome sum of money for coming forward and helping the government hold the fraudsters accountable.

Medicare Fraud Cases Making the News

Last spring, Genova Diagnostics agreed to pay somewhere between $17 million and $43 million to settle allegations the lab sent unnecessary fecal tests to Medicare, Tricare and the federal employee health program in violation of the False Claims Act.

Darryl L., who was a former vice president and chief medical officer at Genova Diagnostics, blew the whistle on his former employer, according to the Asheville Citizen Times. Unnecessary medical labs to test stool samples and gauge food sensitivity purportedly were routinely ordered for patients who didn’t medically need them, according to the whistleblower lawsuit.

In another case, Senator Rick Scott of Florida co-founded Columbia Hospital Corporation, which now is one of the nation’s largest for-profit hospital companies after merging with HCA Healthcare. Just months after Scott left the company, the U.S. Justice Department reported that Columbia/HCA had agreed to pay $840 million in criminal fines, civil damages and penalties due to alleged Medicare and Medicaid fraud committed during the time Scott was the company’s CEO. In 2002, Columbia/HCA settled yet another set of Medicare/Medicaid fraud allegations for an additional $881 million. The company also pleaded guilty to 14 corporate felonies.

Hospital, Chiropractor Cases Show Range of Medicare Fraud

In West Virginia, a whistleblower will receive $10 million of a $50 million Medicare fraud lawsuit settlement. That case involved allegations that Wheeling Hospital, Inc. paid kickbacks and sent in Medicare claims for unnecessary or improper doctor referrals. The lawsuit brought forth allegations of violations of the False Claims Act, Stark Law and Anti-Kickback Statute that purportedly occurred over the course of more than a dozen years. Louis Longo, who had served as Wheeling Hospital’s executive vice president, filed the whistleblower lawsuit in 2017.

In Florida, a chiropractor has pleaded guilty to Medicare fraud charges after he and several co-conspirators allegedly created several shell companies to hide the fact that many durable medical equipment supply companies were all owned by the same group of people, which Medicare disallows. According to BocaNewsNow, the group sent in more than $20 million of illegal claims that allowed them to receive upwards of $10 million from Medicare and the Civilian Health and Medical Program of the Department of Veterans Affairs. Dr. Richard Davidson could face a decade in prison for his admitted role in the fraudulent activity.

What is the False Claims Act?

A federal law enacted in 1863, the False Claims Act provides individuals the opportunity to file a lawsuit on behalf of the U.S. government and to receive a portion of any successful lawsuit or monetary settlement. Such a lawsuit is called a qui tam action. The person who initiates the qui tam action is known as the relator. The U.S. government has the option to intervene in the pursuit of justice.

The False Claims Act makes it a crime to submit a false claim to the government or to cause another person or entity to submit such a false claim. Additional liability is possible for anyone who conspires to procure violations of the False Claims Act.

When the government intervenes in a qui tam action, the relator may receive between 15 and 25 percent of the amount recovered. Without the government’s intervention, the relator may receive between 25 and 30 percent of the amount recovered.

Billions of Dollars in Fraud

According to the Centers for Medicare and Medicaid Services (CMS), the estimated total of improper payments made by Medicare in 2019 alone was about $28.91 billion, which amounted to approximately 7.25% of the total amount paid.

CMS reviews the programs in efforts to reduce all types of improper payments, some of which are due to Medicare fraud cases, but some of which are questioned due to regulatory or administrative requirements that may result in underpayments or overpayments, according to the CMS website.

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