Expect More Medicare False Claims Act Lawsuits in 2013

The Obama Administration is a big fan of the False Claims Act and, in particular, the qui tam provisions that allow individual citizens to initiate lawsuits on behalf of the U.S. Government.

Last year, the federal government recovered more than $3 billion from healthcare providers that submitted false claims to Medicare, Medicaid, and other government healthcare programs.  Most of the cases were filed by individual whistleblowers under the False Claims Act’s qui tam provisions.

The largest cases were brought against pharmaceutical and medical device companies.  Glaxo Smith Kline paid $1.5 billion  to settle allegations that it promoted off-label use of its drugs, which resulted in improper reimbursement from Medicare, Medicaid, and other government programs. 

Other examples of healthcare fraud this year involved hospitals, skilled nursing facilities, hospices, home healthcare agencies, and ambulance services.  The largest False Claims Act settlements involving hospitals in 2012 were:

Tenet Healthcare Corporation paid $43 million to settle allegations that it improperly billed Medicare for admissions to inpatient rehabilitation facilities that were not medically necessary.

Hospital Corporation of America (HCA) paid $16.5 million to settle allegations that it violated the Stark Statute by entering into favorable leasing arrangements with doctors who referred patients to the hospital.

Beth Israel Medical Center paid $13 million to settle allegations that it selectively inflated fees to get more "outlier payments."

Freeman Health System paid $9.3 million to settle allegations that it violated the Stark Law by providing incentive pay to physicians who referred patients to the hospital system.

Adventist Health System/Sunbelt Inc. paid $3.9 million to settle allegations that it improperly used billing modifiers and billed for services that were not actually provided.

The False Claims Act allows private citizens to file suits on behalf of the government to recover three times the amount of false claims plus penalties of $11,000 per claim.  The cases are filed under seal (in secret) to give the government an opportunity to conduct an investigation and decide whether to join the lawsuit.

If the government recovers money from the defendants, the whistleblower, known as a relator, receives up to 30 percent of the recovery as a reward.  Whistleblower rewards in Medicare and Medicaid fraud cases can reach hundreds of thousands of dollars and even millions of dollars.

If you are aware that false claims are being submitted to Medicare or Medicaid, then you should consult with an experienced False Claims Act attorney immediately to protect your rights.  To arrange a free and confidential consultation by phone or in person, call my office today at (917) 652-6504 or click here to contact me via email.

John Howley, Esq.

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