Healthcare is a trillion dollar industry in the United States. Unfortunately, billions of dollars are lost every year to healthcare fraud. And new frauds are hatched all the time. While no two frauds are exactly the same, there are some common themes. Understanding these basics is an important step for anyone who believes they have information that relates to a healthcare fraud on the government.
With more and more Baby Boomers reaching their retirement age and on the verge of enrolling in Medicare, and the Affordable Health Care Act potentially expanding the Medicaid ranks by as many as 20 million people, the government’s need to prevent and stop healthcare fraud is even more pressing. In fact the Obama administration has proudly pointed out that it has prosecuted several major healthcare fraud rings and recovered in excess of $8 billion dollars since first taking office. In spite of their successes, it is estimated that loss due to improper Medicare and Medicaid payments was more than $57 billion in 2011 alone.
Being thoroughly knowledgeable about the process and having the right team on your side to help you navigate what can be treacherous waters when traveled alone, can make all of the difference in the world when it comes to reporting fraud against the government and protecting yourself in the process.
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- What type of information does someone have to have in order to report a healthcare fraud on the government?
A: I get asked this question a lot and there is no right answer. We always start with the same question though – what evidence do you have of the fraud on the government besides what’s happened to you? Being able to show how someone covered up a fraud by retaliating against a whistleblower is important, but that’s just the cover-up. It’s critical that the whistleblower also have information about how the fraud was actually committed in the first place. We ask to see documents or other hard evidence that can corroborate what the whistleblower claims was the fraud on the government because that’s what the government is expecting to see to prove any case. The information can be emails, a spreadsheet, internal memos, a power point presentation or the terms of the government contract itself; it is going to vary from case to case.
- What should someone do if they have information that a healthcare provider is submitting bills to the government for services that have not been performed?
A: Government healthcare programs only pay healthcare providers for services that are actually performed so if someone has information that a provider is billing the government without providing the services, that conduct could be a fraud on the government. Sometimes this happens where the patient does not actually exist, a ghost patient. In other cases, there is an actual patient but a provider will bill for a test or service that the patient never received. We would want to talk to the whistleblower right away to discuss how frequently this is happening, how the whistleblower learned of this information and what documents the whistleblower has to corroborate what they have witnessed. Together we would then develop an action plan.
- What should someone do if they believe they have witnessed a healthcare provider performing tests and procedures on Medicare or Medicaid patients that are not medically necessary?
A: If a healthcare provider is performing tests and procedures that are not medically necessary and billing the government for those services, then a person who witnesses this could have evidence of a fraud on the government which could form the basis for a False Claims Act case. But there is something else to emphasize if someone is a witness to this kind of fraud. These cases can be especially disturbing because they aren’t just defrauding the government. They are performing unnecessary tests and services on actual patients. Often times this means potential patient harm. If that’s the case, it’s especially important for the person to immediately contact a whistleblower lawyer who can assess the facts quickly and alert the appropriate government officials as needed to step in and protect patients .
- What exactly is upcoding when someone is talking about healthcare fraud?
A: To understand upcoding you have to know how the government pays healthcare providers for care and services. When the government contracts with healthcare providers for everything from a hearing test to open heart surgery, it assigns numeric codes to everything a provider is doing. The government also decides how much it will pay the provider for each treatment or service associated with that code. The provider submits bills to the government for payment using those codes and the government calculates how much to reimburse according to what the provider said it did. Upcoding occurs when a provider submits a claim for a more expensive procedure or service than the one actually performed. So, if a provider performed a level one exam, the provider might upcode by falsely documenting that a level two exam had been performed in order to get a higher reimbursement. While upcoding cases have been isolated in the past, the increased use of electronic medical records and electronic billing have created a perfect storm where healthcare providers may be tempted to use search and replace functions to upcode every patient’s record quickly to instantly increase their reimbursement rates – often time with no paper trail. Whistleblowers – people with inside information about how upcoding is happening – are going to be critical to curbing this potential new frontier for healthcare fraud.
- How are illegal kickbacks related to healthcare fraud?
A: Offering, paying, soliciting or receiving money or other things of value to induce or reward any person for referring, recommending or arranging for federally-funded medical items and services can be a violation of multiple federal laws including the Anti-Kickback Statute and the False Claims Act. Congress made this a bright line law because the federal Government spends billions of dollars for healthcare for some of our most vulnerable citizens, including the elderly, and wants to make sure that decisions about their medical care are based on sound medical judgment and not based on the financial gain a provider gets just because the government is paying for that care. Since kickback schemes can be extremely hard for the government to detect, we rely heavily on whistleblowers to expose these illegal arrangements that can corrupt healthcare decision-making.
- How is unbundling healthcare services and billing the government for each service separately a healthcare fraud?
A: Unbundling – like upcoding – is a manipulation of how the government pays for care and services. Government health care programs ‘bundle’ some commonly ordered tests and services together under one code and pay a lower rate for the bundle. However, some medical providers have figured out that if they broke out each of the tests or services separately, or unbundled them, they could get paid more. This is a healthcare fraud because the provider is getting paid more in reimbursement than the government contracted for by having the bundled rate. When a provider does this on a systematic basis, it can lead to the government paying out potentially millions more than it planned to for routinely ordered care and services.
- If a healthcare provider is falsifying information in patient records, billing records or some other documents, can that be a healthcare fraud?
A: Yes. The False Claims Act creates liability for any person who knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim. That means that if a healthcare provider puts false information in a patient record, in a cost report or any other document that is connected in an important way to the provider getting paid by a government healthcare program, then this could be a violation of the False Claims Act. These cases come up in a lot of different areas in healthcare so it’s important for someone who believes there is falsification going on to work with a whistleblower lawyer to apply the facts of what they have witnessed to the law in this area.
- Does a doctor or a hospital have to be involved for there to be a healthcare fraud?
A: That’s a great question and the answer is definitely no. Healthcare fraud frequently involves doctors and hospitals but it doesn’t have to. Medical advances allow many healthcare services to be provided to patients in nursing homes, skilled nursing facilities and even their own homes, and government health care programs pay out billions every year to help allow that to happen. These new channels for health care delivery are potential growth industries for fraud and don’t have to have anything to do with doctors or hospitals. Home health care fraud, hospice care fraud and nursing home fraud are on the rise as baby boomers age and we look for alternatives to hospitals for treatment. A good rule of thumb is that if the government is paying to provide a healthcare service, it is going to be a potential avenue for someone to commit healthcare fraud whether there is a doctor or hospital involved or not.
- Has the government been defrauded if a healthcare provider has been overpaid for healthcare services and has not returned the overpayment?
A: It’s ironic that we teach children that the right thing to do in a financial transaction when someone else makes a mistake is to return the money that does not belong to you. But in government contracts, it was less clear that the provider actually HAD to give the money back to the government and many of them kept the overpayments. Thankfully, in 2009, Congress passed an amendment to the False Claims Act making it clear anyone who “knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government” can be liable under the False Claims Act. This is especially important in healthcare. The government’s reimbursement system has a known tendency to overpay providers. Since the law now makes it clear overpayments must be returned, providers who retain these overpayments will be liable under the False Claims Act.
- If I have information about healthcare fraud, why should I contact a whistleblower lawyer before I do anything else?
A: There are a lot of areas of the law where ordinary citizens can act on their own behalf. Blowing the whistle on a fraud on the government just isn’t one of them. The whistleblower laws have unique rules and procedures that the whistleblower must follow to be eligible for the rewards they are entitled to and to ensure the full protection of the laws prohibiting an employer from engaging in retaliation. These laws are based in a simple concept that you cannot defraud the government, but there is nothing intuitive about the way they actually work. When the whistleblower consults an experienced whistleblower lawyer early on in the process, he – or she – can help navigate these rules and procedures and can guard against pitfalls the whistleblower would have no reason to expect are out there. Besides, the whistleblower must be represented by a lawyer to bring a False Claims Act case. Before a whistleblower decides on taking any action, the whistleblower should seek the advice of experienced whistleblower attorneys.