The False Claims Act – Health Care Fraud

For years, the bulk of recoveries under the False Claims Act (“FCA”) have been for actions challenging Medicare and Medicaid fraud.  Medicare and Medicaid lose an estimated $60 billion or more annually to fraud, making fraud on these programs one of the most profitable crimes in America.

Whistleblowers have helped the government recover billions of dollars from leading pharmaceutical companies, device manufacturers, and various medical providers.  Given the enormous volume of claims submitted under the Medicare and Medicaid programs, the federal and state governments are not sufficiently staffed to effectively detect the fraud and abuse perpetrated by dishonest physicians, healthcare providers and suppliers.  For this reason, whistleblowers have proven to be key participants in the fight against health care fraud.

Of the $2.9 billion recovered by the Department of Justice in 2018, $2.5 billion involved the health care industry.

Whistleblower reporting has led to billions of dollars in settlements of Medicare fraud cases and other health care fraud cases, with whistleblowers receiving up to 30% of these recoveries as a reward.  These cases involve, among other things:

  • Upcoding schemes that inflate medical bills by claiming patients require more expensive procedures than actually necessary
  • Misrepresentation of diagnoses to justify medically unnecessary services
  • Unlawful billing for procedures never performed or supplies never ordered
  • Self-referrals in violation of the Stark Law, when a physician refers certain services to an entity in which they have a financial stake
  • Pharmaceutical company fraud – Payments, also known as kickbacks in violation of the Anti-Kickback Statute, to physicians, physician practices, or hospitals from pharmaceutical companies or others in return for drug promotion or purchasing
  • Pharmaceutical company fraud – Off-label marketing by pharmaceutical companies, or the marketing of prescription drugs for purposes or to patients not approved by the Food and Drug Administration
  • Pharmaceutical company fraud – Safety issues in the production or distribution of prescription drugs
  • Pharmaceutical company fraud – Unlawful billing schemes that artificially raise the price of prescription drugs

The government has awarded whistleblowers millions of dollars in health care-related FSA cases:

Prime Healthcare: A whistleblower received approximately $17 million in connection with allegations that Prime Healthcare and its founder and CEO violated the FCA by its upcoding practices – admitting patients who required less costly, outpatient care and by billing for more expensive patient diagnoses than the patients had.

Health Management Associates (“HMA”): Multiple whistleblowers received awards totaling tens of millions of dollars in connection with allegations that HMA violated the FCA by billing government health care programs for inpatient services that should have been billed as outpatient or observation services, paying kickbacks to physicians in return for patient referrals, and submitting inflated claims for emergency department facility fees.

AmerisourceBergen: Several whistleblowers received an award of $93 million from pharmaceutical distributor AmerisourceBergen Corporation in connection with allegations it violated the FCA through its repackaging and distributing of pre-filled syringes not approved for sale or use by the FDA.

If you have information that you think amounts to health care or Medicare/Medicaid fraud, the whistleblower attorneys at Bernstein Liebhard can help. Contact Michael S. Bigin or Laurence J. Hasson for a free, confidential consultation.