Articles Posted in Whistleblowers and Qui Tam Lawsuits

While a violation of the federal False Claims Act is a principle reason why many qui tam whistleblower lawsuits are filed, a breach of either of two other key laws, the Stark law and the Anti-Kickback law, is also grounds for launching a qui tam whistleblower lawsuit. As we will see in the final installment of this week’s series, some of the most flagrant cases of Medicare fraud involve violations of either the Anti-Kickback law, the Stark law or sometimes one or both and the False Claims Act. Regardless of the cause of action, the qui tam lawsuit specialists at the Brod Law Firm are committed to representing the brave whistleblowers who step forward with information on any of these violations.

Of the two pieces of legislation, the Stark law, 42 U.S.C. Sec. 1395nn, is the more recent to be enacted, becoming law in 2011. Under the law, named after its sponsor, former Bay Area U.S. Rep. Fortney “Pete” Stark, physicians are prohibited from referring Medicare or Medicaid patients for designated health services to a medical provider in which the physician or a family member holds a financial stake, unless an exception applies. The law also prohibits designated health services entities from submitting claims to Medicare that originate from a prohibited referral.

The Stark law may be relatively new, but it has already managed to land several violators in court, including a case against one that is believed to have generated the largest damage amount against a community hospital in U.S. history. The case, against the Tuomey Healthcare System of South Carolina, revolved around lucrative compensatory arrangements Tuomey had with several part-time physicians to refer patients to its medical facilities. The jury in the federal lawsuit found that Tuomey’s arrangements violated both the Stark law and the False Claims Act, and a federal judge this month ordered Tuomey to pay more than $276 million in fines and penalties. The judge also rejected Tuomey’s motions for a new trial, according to The State.
As its name would imply, the Anti-Kickback law, 42 U.S.C. Sec. 1320a-7b(b), prohibits the offering, tendering, soliciting or receiving anything of value to induce or compensate for referrals or generate federal healthcare program business. First enacted in 1972, the act stipulates explicitly that “a claim that includes items or services resulting from a violation” of the act will be considered a bogus or fraudulent claim that falls under the False Claims Act.

One of the biggest cases to trigger an invocation of the Anti-Kickback law was one already cited in this series, the notorious Columbia/HCA qui tam lawsuit that led its successor company, HCA, to plead guilty and pay fines of more than $1.7 billion for, among other things, offering kickbacks to doctors. However, there have been numerous other examples involving a violation of the Anti-Kickback law, including these recent cases in just 2010:

• The Health Alliance of Greater Cincinnati and the Christ Hospital in Mount Auburn, Ohio, agree to pay $108 million to settle accusations they payed physicians kickbacks in exchange for referring cardiac patients to the hospital
• The St. Joseph Medical Center, based in Towson, Md., agrees to pay $22 million to settle a lawsuit alleging payment of kickbacks to MidAtlantic Cardiovascular Associates for purported professional services deals in return for MidAtlantic’s referrals to the medical center.
• The former owners of the City of Angels Medical Center in Los Angeles agree to pay $10 million for a scheme that involved doctors at the center allegedly paying recruiters kickbacks to find homeless patients, who were administered medical treatments, many of which were deemed unnecessary but were billed to the federal government.

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The leading legal framework for so-called qui tam lawsuits, in which a private individual reports past or present fraud committed against the government and sues the perpetrator, is the federal False Claims Act. The act of filing such claims is known as whistleblowing, and there is perhaps no form of fraud as evocative of the governing False Claims Act as when medical providers submit fake or phantom bills for services that were either not necessary or in some cases not even performed. We at the Brod Law Firm take great pride in having served as advocates for whistleblowers in such cases.

One of the most notorious cases of fake or phantom billing fraud committed against Medicare or Medicaid came to light just last year, according to Money magazine. In February of 2012, federal authorities announced that Dr. Jacques Roy, a Dallas-area physician, allegedly soaked Medicare and Medicaid for almost $375 million over five years, which would rank as the biggest healthcare fraud ever committed in the United States. In the case, which was delayed until the middle of this year, Roy was charged with fraudulently billing Medicare for more than $350 million and Medicaid for more than $24 million by using “recruiters” to bring beneficiaries under the two programs to him so that he could bill them for unneeded services.

Statements made by federal authorities concerning the indictment of Roy suggested that the scope of the fraud was indeed breathtaking.

“The conduct charged in this indictment represents the single largest fraud amount orchestrated by one doctor in the history of the Health Care Fraud Prevention and Enforcement Action Team and our Medicare Fraud Strike Force operations,” said U.S. Deputy Attorney General James Cole.

The Roy case, while spectacularly large, has been by no means the only case of mega-fraud uncovered by federal prosecutors. as a broad-based scheme that was revealed in 2010 made quite clear. In a story the New York Times detailed with the telling headline, “Real Patients, Real Doctors, Fake Everything Else,” a ring of gangsters billed Medicare for more than $100 million and collected $35 million over at least four years.
According to federal prosecutors, the band of mobsters invented 118 fictitious health clinics in 25 states, stole the identities of doctors, and then associated them with legitimate Medicare recipients whose identities were also stolen. The entire doctor-patient-clinic illusion provided the basis for submitting false claims for a variety of medical services that were never performed, from ultrasound exams to magnetic resonance imaging tests to heart tests and more.

Many cases of fraud against Medicare or Medicaid are able to slip under the radar because much of our healthcare billing is based on an honor system, with the healthcare providers usually the front-line actors relied upon to determine what is a justifiable medical procedure and what is not. Thus, it is easy to see how unethical medical providers, sometimes working in tandem with equally unethical patients and other healthcare providers, can purloin major money out of government coffers.
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Earlier this month, we talked about how on a micro level Medicare fraud can inflict a toll on individuals and the ways in which beneficiaries can play a role in combatting it. But for many people who aren’t directly hurt by Medicare fraud, the chief way they can relate to its ills is on the macro level, e.g., the big-picture, national impact it can have. We at the Brod Law Firm are proud to serve as advocates for Medicare fraud victims nationwide. This week we will delve into the major forms of Medicare fraud and how its broad scope of scamming translates into a national outrage that receives too little attention.

Amid all the battles over the national debt ceiling, the budget, taxes, and the cost of healthcare, the public doesn’t seem to get proportionate information on one factor that has the potential to adversely impact all these issues: Medicare fraud. Some estimates have calculated that the various forms of Medicare fraud cost taxpayers $250 billion per year, but unfortunately there are few reliable figures out there. However, it is interesting to note that in 2010, the year that President Obama signed his Affordable Health Care Act into law and pledged to cut $500 billion in Medicare spending over 10 years, the federal Government Accountability Office filed a report claiming that it had found $48 billion worth of “improper payments” from Medicare. That figure for fraud is just from one year, but some estimates place the annual losses to Medicare fraud at tens of billions of dollars more, and that doesn’t even take account the losses Medicaid sustains every year due to fraudulent activity.

Healthcare scammers employ many means and channels to defraud Medicare and Medicaid, with the players in such schemes often from hospitals, medical practices, nursing homes and other long-term care facilities, hospices, laboratories, home healthcare providers and ambulance services. The methodology of schemes against Medicare or Medicaid, though, often falls into one of these three general categories:

• Coding fraud – Upgrading the billing code and therefore the cost of medical services or employing other fraudulent billing methods to inflate the cost of healthcare.
• Fake or Phantom billing – The submitting of bills for unnecessary procedures or medical tests or the billing for procedures or tests that were never performed.
• Kickback schemes – A joint venture in which a patient takes a kickback from a medical provider in return for going along with the provider’s fraudulent billing.

Coding fraud typically involves what’s known as a “CPT code,” or Current Procedural Terminology, and usually takes the form of a medical provider “upcoding,” or submitting a code that doesn’t accurately reflect the treatment that was provided but results in a higher bill because it is purportedly for more extensive and/or expensive care. Coding fraud can also take the form of the “unbundling” of billing, which involves separate charges for a series of related procedures or tests, and “split billing,” which tries to claim that services provided on one day were performed over more than one day.

One of the biggest, most notorious recent examples of coding fraud came to light in 1996, when The New York Times began its investigation on Columbia/Hospital Corporation of America, a globally gigantic for-profit operator of healthcare facilities since the merger that formed it in 1993. The FBI launched a probe into Columbia/HCA in 1997, and in 1999 the company, by then known as HCA, admitted to fraudulently billing Medicare and other programs by upgrading diagnostic codes and to offering kickbacks to doctors in the form of hospital partnerships for recruiting patients and submitting the inappropriate codes. HCA ultimately pleaded guilty to more than a dozen civil charges and payed fines of more than $1.7 billion through 2002, of which more than $500 million went to two whistleblowers.
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At the Brod Law Firm, we are honored to work with brave individuals who come forward to report Medicare fraud. These admirable people help the government recover money that has been stolen from its coffers, ensuring the funds are available to the many honest Americans who rely on the program for their health care needs. In this post, we look at a ruling by a federal judge seated in California that discusses what needs to be alleged to bring a successful Medicare fraud claim. Attorney Brod, our office’s California health care fraud lawyer, believes in communicating closely with his clients and helping them to understand the law and the legal process. While it is not a substitute for meeting with our team (the first consultation is free), we hope this post helps readers begin to understand the complex law of Medicare fraud and the False Claims Act.

Former Employee Alleges Manipulation of Medicare Risk Scores to Increase Payments

A website aimed at executives in the health care industry (an unusual source for our blog, but one that provided useful coverage) reported on a ruling this summer in a whistleblower case alleging Medicare Advantage fraud. Medicare and Medicaid use a risk-scoring system, developed in the mid-to-late 200s, to adjust monthly payments. In 2009, Swoben, a former data manager for the SCAN health plan which serves California and Arizona, accused SCAN and other insurers of manipulating these scores. He claimed HealthCare Partners, a managed care group serving 570,000 patients in California, engaged in a scheme to artificially raise patient risk scores. According to Swoden, the insurer defendants knew that the group did not properly review codes and that an independent review actually concealed the fraud.

Can individuals really make a difference in the effort to recover money that scammers have stolen from the nation’s coffers? This question recognizes that health care fraud impacts individuals and the nation. As detailed below, vigilance goes a long way in avoiding being the target of fraud and individual whistleblowers, including program beneficiaries in addition to company insiders, are crucial in helping the government recover lost funds. With offices in San Francisco, Oakland, and Sacramento, The Brod Firm is dedicated to helping prevent Medicare fraud, serving as a law firm for Medicare fraud victims nationwide.

Medicare Fraud and Individual Beneficiaries: How it Can Harm You, How You Can Fight It

Medicare fraud can harm individual beneficiaries in a number of ways. Scammers can deplete allotted services so that things like physical therapy and durable medical equipment are not available when needed. Fraud can also result in an individual receiving inappropriate treatment, such as providing medication for conditions that the patient does not have (which may carry risky side effects) while failing to treat actual health care needs. A New York Times piece from last fall catalogs some of these threats and the very real people that have been impacted by Medicare fraud.

At The Brod Firm, we believe that the law can be a powerful instrument of good, helping people in times of need and bringing justice to our communities. Sometimes, however, justice requires the bravery of honest individuals willing to stand

up for what is right. An example is the important role of whistleblowers in shedding light on health care fraud, including Medicare fraud, pursuant to the False Claims Act. We have referenced some of these cases before, but wanted to provide a more general overview of this area of law. We hope this brief primer helps people gain a better understanding of these cases and our work as a California whistleblower’s law firm. This is merely an overview; witnesses to healthcare fraud are encouraged to call us and arrange a free consultation to discuss specific concerns (including the contours of attorney confidentiality) and the role of health care fraud whistleblowers in more detail.

Fraud & The False Claims Act

Uncovering health care fraudfrequently invovles whistleblowers. People are often curious about whistleblowers, likely because they relate more to those reporting fraud than those committing it. The following story is continuing proof that whistleblowers are often ordinary people who are motivated to take extraordinary steps. Whistleblowers play a vital role in identifying and bringing an end to health care fraud. As a California health care whistleblowers’ law firm, we are proud to work alongside these individuals who epitomize the term “everyday hero.”

63 Year Old Vet Brings Down Multi-Billion Dollar Company’s Medicaid Fraud Scheme

In late 2011, ABC News reported on a Medicaid fraud lawsuit that they called “a real-life David versus Goliath story.” United States Congressman Rep. Trey Gowdy (R-SC) referred to the underlying fraud as the type of behavior that made people lose trust in the government. The fraud, committed by a multi-billion dollar company, was brought down by an ailing 63 year old man.

In recent years, as health care becomes more of a business than a service, there has been a steady increase in cases of health care fraud. Companies and individuals are manipulating the system for profit and Medicare fraud has become especially prevalent. These schemes are tough to identify and it often takes insiders willing to risk their careers to shed light on these operations. Our San Francisco whistleblowers law firm is proud to work alongside these brave individuals, protecting Medicare fraud whistleblowers from retaliation and helping them put an end to fraudulent practices that hurt us all.

The Alleged Fraud: Under-billing Clients to Cut Competition While Billing Medicare at Full Price

Earlier this week, a California-based medical laboratory agreed to a settlement with the federal and state governments as well as two former employees. As reported by The San Francisco Chronicle, this agreement concludes a lawsuit brought by the state of California and the two former employees accusing the defendant corporation of cheating Medicare and Medi-Cal by billing the agencies at standard rates while simultaneously charging only cut-rate fees to their clients. More specifically the lawsuit alleged that the lab charged fees that were up to 80% less than their standard rate in exchange for the client’s commitment to use the company for future Medicare and Medi-Cal services. The defendant is Diagnostic Laboratories and Radiology (“Diagnostic”), a company that is the largest supplier of both X-ray and laboratory services to nursing homes on the West Coast.

Medicare fraud impacts all of us. The misuse of public funds places an increased burden on taxpayers. The abuse of the health care system leads to higher insurance premiums and contributes to the rising cost of medical services. Additionally, fraud misdirects limited funds away from those truly in need of health care assistance. As a California Medicare fraud law firm, we work with the brave people who report fraud to take legal action against the perpetrators.

Court Hands Down Sentence for Doctor in Medicare Fraud Scheme

A Brooklyn federal court handed down a sentence this week in a Medicare fraud case that involved more than $77 million in false claims. The Staten Island Advance reported that the court sentenced Dr. Gustave Drivas to 151 months in prison and ordered him to pay $51 million in restitution for his role in the fraudulent scheme. He was also ordered to forfeit $511,000 and will be subject to post-release supervision for three years following his prison term. Dr. Drivas’ sentence follows his conviction in April for health care fraud and health care fraud conspiracy, a verdict that followed an eight-week trial. In July, he was stripped on his medical license. He is one of thirteen suspects who have either pled guilty or been convicted for taking part in the fraud. He is appealing.