Articles Posted in Whistleblowers and Qui Tam Lawsuits

As we have detailed on these pages, the scope and brazenness of Medicare fraud is truly breathtaking. The federal government is having trouble keeping up with all the schemes, and some of them are quite blatant indeed. But San Francisco qui tam lawsuit attorney Gregory J. Brod would cite the allegations against one doctor that surfaced in the news this week as a case, if proven, that would take brazenness in Medicare fraud to a new low.

According to the Detroit Free Press, a search warrant affidavit that was unsealed in federal court detailed allegations against Dr. Farid Fata in which his health maintenance organization practice billed Medicare $225 million, of which $109 million was for chemotherapy or other cancer treatments and $91 million was paid by Medicare to Fata’s medical practice. Trouble is, many of the treatments were administered to patients who did not have cancer, the government’s attorneys charge.

If the allegations are proven to be true, not only would fraud have been committed against Medicare, fleecing the U.S. Treasury and the taxpayers as well as contributing to upward pressure on Medicare premiums, but perhaps even more troubling, the health of innocent people could have been placed in jeopardy through the use of treatment that was not appropriate.

As if the aforementioned allegations are not bad enough, Dr. Fata has also been accused of showing interest in spending some of the ill-gotten gains on a $3 million castle overlooking a seaside resort area in Lebanon. In the search warrant, which was executed in November 2013, the FBI sought the contents of Fata’s email account in order to track the movement of tens of millions of dollars that moved among various Fata-linked entities. Included among the emails is one in which Fata asks his financial adviser to contact Fata’s father and go along with the father to inspect and assess the value of investing in the multimillion-dollar seaside castle. The email was given an “urgent” subject line, and in it Fata asks if the castle can be “funded from the Fata Foundation,” which one of his numerous trusts.

Fata has sought to prevent the email from being submitted as evidence to jurors at a trial that starts October 14 in federal court.

If convicted, Fata faces 10 years in prison. In the meantime, he has been held at a federal prison for the last year after his $9 million bond was revoked.
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Health care is an ever-evolving field with constant changes both in the area of medical knowledge and in terms of health care as a business. Medicare began back in the 1960s and the concept of Medicare Advantage (“MA”) programs dates back to the mid-1990s and allows Medicare beneficiaries to choose a private company to provide their Medicare services. Both have seen changes, with Medicare Advantage undergoing significant changes in 2003 and significant growth in the past decade. Sadly, along with the growth has come the problem of Medicare Advantage fraud. Efforts to combat this fraud are also evolving and our Northern California Medicare fraud law firm is keeping a close eye on the important legal developments in this area.

Health & Human Services OIG Lists Medicare Advantage Fraud Among Top Challenges

Each year, the Office of the Attorney General (“OIG”) for the Department of Health and Human Services (“HHS”) creates a list of the top management challenges that HHS is facing, a list that can point to some of the department’s key vulnerabilities. Item Six in the list of the Top Management & Performance Challenges for 2013 (released in December 2013, this appears to be the most recent list) is “Preventing Improper Payments and Fraud in Medicare Advantage.” According to the OIG, taxpayers lose billions of dollars because of improper payments to MA plans. In FY 2013, HHS identified a 9.5% error rate for MA plans which corresponds to an estimated $118 billion in improper payments including $9.3 billion in overpayments and $2.6 billion worth of underpayments. This includes both accidental errors and fraudulent transactions.

The federal government’s quest to stem the tide of fraud against Medicare has been overmatched by a flood of schemes that have been as widespread as they have been varied. For every case of Medicare fraud the government has cracked, it seems, there are many more that are go unpunished. And that is a reason why San Francisco qui tam lawsuit attorney Gregory J. Brod reminds us that brave whistleblowers who step forward with critical information on fraud help buttress the government’s efforts to reduce this crime wave against U.S. taxpayers.

According to The New York Times, the federal government is spending $600 million per year to combat Medicare fraud, a campaign that includes the marshaling of expert teams and use of sophisticated computers. Despite Washington’s efforts, however, the fraudsters remain several steps ahead of the government. To put the problem in a monetary perspective, it has been estimated that fraud and systematic overcharging against Medicare costs about $60 billion a year, which translates into 10 percent of the program’s annual expenditures, but the government was only able to recover about $4.4 billion last year.

Part of the problem stems from the sheer number of claims that must be reviewed for verification purposes: at the Centers for Medicare and Medicaid Services, the agency responsible for overseeing the vetting process, only 3 million claims of an estimated 1.2 billion claims per year are reviewed.

Systemic problems also plague the government’s efforts to curtail abuses against Medicare. Foremost among them is the fact that the government employs an army of outside contractors who are poorly managed, with conflict-of-interest issues, political pressures, and competition and lack of communication among the contractors some of the problems that hamper their efforts.

As another example, Medicare opted to shut down a successful hotline in South Florida, which is a hub for Medicare fraud, claiming that the hotline was no longer needed. But the suspension of the hotline has led to calls being routed to a general number, which in turn has significantly slowed down the government’s response time to complaints.

But while the pace of addressing complaints in South Florida has slowed down, the variety and depth of schemes against Medicare in the Sunshine State has picked up steam. Indeed, according to the South Florida Business Journal, a study released by the Department of Health and Human Services’ Office of Inspector General has found Miami to the be the epicenter of a scheme to defraud Medicare for HIV-related drugs and treatments: it seems that while only 2 percent of Medicare beneficiaries who receive drugs for treatment of HIV live in the Miami area, that small percentage accounts for 24 percent of all billing patterns that have been deemed questionable.

Included among the practices that have raised red flags have been the prescriptions of $6.5 million worth of HIV drugs for 888 patients who have no history of the disease on record. Other eyebrow-raising practices have included prescriptions meted out for an unusually large number of HIV drugs or prescriptions for the medications being written from six or more pharmacies or doctors.
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At the Brod Firm, we do the work we do for many reasons. We enjoy the intellectual challenge and being able to constantly grow, using what we learned yesterday to improve our work today. We enjoy serving our clients and helping them through their legal challenges, difficulties that often arise during life challenges. From an injured pedestrian to a grieving parent, a wronged tenant to a patient whose well-being was sacrificed for someone else’s financial reward, we enjoy making a difference. In the particular case of our work as a California health care fraud law firm, we enjoy partnering with inspiring whistleblowers in anti-kickback and other matters to fight for our health care programs and for patients’ rights. We are honored to play this role.

Kickback Case Involving Prenatal and Infant Care

Last week, an FBI press release announced the guilty pleas of Tracey Cota and Gary Lang. Both pled guilty to conspiring to violate the Anti-Kickback Statute by referring patients to hospitals in exchange for illegal payments. Lang served as the CEO of a hospital that was a provider enrolled in the Georgia Medicaid program while Cota owned and acted as COO for a corporation that operated multiple medical clinics in the Atlanta region and on Hilton Head Island.

Imagine starting a new job. You’ve probably left behind another job and made other changes to prepare for the new experience, perhaps even relocating. No matter how experienced and educated you are, it is a nerve-wracking experience. It takes time to learn company practice. Now suppose you are asked to do something you know is wrong. What would you do? In the case of health care fraud and other forms of government contracting fraud our Northern California whistleblowers’ law firm helps people who find themselves in this situation, helping them report the wrongdoing while protecting their own interests.

False Claims Allegations Brought Thanks to Whistleblower and Supported by Another Inside Witness

Last week, an FBI press release detailed federal health care fraud charges filed against Jocelyn Gumila, a nurse who served as the manager for Doctor At Home (“DaH”). The release details allegations including double-billing, over-billing, and improperly certifying patients as eligible for home-based care. Doctor At Home allegedly helped home health agencies pursue false billings such as claims for more than $1,000 per month to provide nurse visits that were not medically necessary.

Suppose your eight year-old child receives a weekly allowance of $5 (perhaps the amount dates us!) and instead of handing him a five dollar bill, you accidentally give him a $20. If he speaks up, you probably praise his honesty, but what if he doesn’t? How do you feel later when you notice your own error? The moment might prompt a lesson in honesty and a discussion of how silence can be dishonest. With your child, there might be room for debate, but what if the recipient is a medical institution and the money closer to a million dollars than five? That scenario might trigger a concept known as reverse false claims, a violation of the False Claims Act that may be costing the government billions a year. As a Northern California medical fraud lawyer, Attorney Gregory Brod is dedicated to working with whistleblowers to end all forms of costly frauds from purposefully filing claims for services that were never provided to knowingly accepting and keeping overpayments.

“Reverse False Claims” and the False Claims Act

The U.S. Justice Department provides a primer to explain key parts of the False Claims Act (“FCA” or “the Act”) and how the law works. As we’ve discussed in prior posts, the Act creates liability for submitting or causing another to submit false claims to the federal government. Medical fraud is one of the key areas in which the Act is invoked and cases are often brought under the “qui tam” provisions that allow a private whistleblower to bring a claim on the government’s behalf. The Primer also notes that Section 3729(a)(1)(G) creates liability for reverse false claims. Initially, this provision was pretty narrow but revisions to the Act in 2009 and 2010 made it clear that Congress intends this reverse false claims concept to create liability when a facility receives an overpayment for services and, despite being aware of the overpayment, fails to return the money within a 60-day period.

It seems as though every time the federal government gains ground in the battle over Medicare fraud, schemers come up with new scams or variations of old ones in an attempt to stay one step ahead of the feds. So it comes as little surprise to San Francisco qui tam lawsuit attorney Gregory J. Brod that testing conducted at clinical laboratories could provide another frontier for healthcare fraud.

According to the Wall Street Journal, a report from the Department of Health and Human Services’ Office of Inspector General released Wednesday called into question $1.7 billion in approved Medicare payments to clinical laboratories in 2010 alone. The report found that more than 1,000 labs had five or more measures of questionable billing in that year. The six measures, median levels and the questionable lines these labs crossed that have raised red flags include the following:

• Lab average allowed amount per ordering physician: median, $61; threshold for questionable, $901
• Lab average claims per ordering physician: median, 3; threshold for questionable, 22
• Lab average allowed per claim: median, $19; threshold for questionable, $129
• Claims with beneficiaries living 150 miles or more away from ordering physician: median, 1.5 percent; threshold for questionable, 12.5 percent
• Lab average allowed amount per beneficiary: median, $47; threshold for questionable, $303
• Lab average claims per beneficiary: median, two; threshold for questionable, nine

In addition to the red flags the 1,000 labs have raised, the very nature of the relationship between clinical laboratories and physicians in general is cause for concern, according to Medicare fraud specialists. The specialists harbor a more general suspicion of inappropriate spending at clinical laboratories, whose services include blood counts, cholesterol screenings and urinalysis, because doctors order their services from the labs rather providing them directly, and whenever a chain of healthcare providers are involved the prospect for fraud rises.

Not surprisingly, Medicare is the biggest payer of clinical laboratory services in the United States; the program paid out $8.2 billion in 2010 for lab services as part of its Part B benefit, which covers doctor visits as well as clinician services. And while enrollment in Part B has been increasing, going up by 10 percent from 2005 to 2010, the surge in spending for lab services through the program has been even more robust, going up by 29 percent during the same period.

While only 13 percent of all clinical laboratories in the nation are located in California and Florida, 43 percent of the labs that surpassed the threshold for having five or more measures of questionable billing were in either the Golden State or the Sunshine State. Indeed, Florida has been the epicenter of much of the nation’s healthcare fraud schemes.

Interestingly enough, the same day the inspector general’s report was released, the U.S. Senate Special Committee on Aging issued another eyebrow-raising report on Medicare fraud. According to CNBC, the Senate committee found that improper Medicare payments increased from $30 billion to $36 billion between 2011 and 2012. At about the same time, government officials began using a technology screening system that is similar to the one credit card companies employ to scan charges and freeze accounts.
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