Medicare fraud is an epidemic in this country. Billions of dollars are stolen from government-funded health care programs each year from providers who bill for health care services to the programs’ beneficiaries that are in violation of laws designed to protect both the patients and the health care programs themselves. These laws include the False Claims Act, the Anti-Kickback Statute, the Physician Self-Referral Act (Stark), the Exclusion Statute, and the Civil Monetary Penalty Law. Fighting Medicare fraud is one of the federal government’s top priorities. It is an ongoing effort to protect the integrity of our health care programs, and to ensure everyone gets a fair shot, does their fair share, and plays by the same rules.
The False Claims Act has proven to be one of the government’s most important weapons in fighting Medicare fraud. Since the FCA was significantly amended in the 1980’s, whistleblowers working together with the government have exposed a variety of health care frauds. They continue to play a vital role in identifying the newest trends in how individuals and companies contracting to provide services paid for by Medicare and Medicaid may be defrauding the government. Some of the more common schemes that have been exposed (or the ones that are so profitably that they are often repeated) include fraud in patient care, billing, and research. For example:
Medicare and Medicaid pay for patient care. Fraud may occur if a health care provider charges for Services Not Rendered. It can also occur if a health care provider performs tests or procedures that Lack Medical Necessity. There have even been cases where hospitals and other health care providers have billed for Ghost Patients, people who did not even exist.
Fraud can also happen that has nothing to do with the care that the actual patient receives. In many Medicare fraud cases, the scheme is entirely about manipulating the payment systems in place to reimburse a health care provider for services to Medicare and Medicaid beneficiaries. This can happen where a provider engages in UpCoding, claiming it provided a more expensive procedure or test than the patient actually got, so that the provider can increase reimbursement from the government. A provider might also engage in fraud by Bundling and Unbundling Services in the way they are billed to the government in order to maximize how much it will be reimbursed for the care. Fraud can even happen if a health care provider discriminates against sicker patients, a practice known as Red-lining, because healthier patients will allow for more profits.
Medicare fraud involving billing also happens when a provider includes false information in the reports it must provide to the government. A health care provider might increase its profits at the government’s expense using Inflated Cost Reports. It may also intentionally retain overpayments that the provider knows were not due and owing from the government.
Above all else, the government expects all contractors to deal honestly with the government. This is especially true for contractors who provide care to the patients who are beneficiaries of government-funded programs like Medicare and Medicaid. Health care providers who submit False Certification of compliance with the rules and regulations to obtain payment for this care may also be engaged in fraud.
Experience has shown that there are an infinite number of potential fraudulent schemes that can occur. In fighting these frauds, the government will need whistleblowers with inside information about the health care providers exposing the newest trends in fraud on the government. If you believe someone has engaged in Medicare fraud and you would like to learn more about or would like to bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. The lawyers at Keller Grover LLP understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.
Types of Medicare fraud include:
Under both the Medicare and Medicaid programs, the government will only pay for procedures and tests that were actually performed or devices actually used. In order to get paid for those services and goods, a healthcare provider must certify that the services were actually performed, or the goods were actually used.
Under both the Medicare and Medicaid programs, the government will only pay for care that is reasonable and necessary for the diagnosis or treatment of illness or injury. Before any healthcare provider is paid for any health care services, treatments, tests, devices or pharmaceuticals provided to patients whose care is paid for by these government programs, the provider must certify that the treatment or service was medical necessary.
The federal Anti-Kickback Statute (“AKS”) was enacted in 1972 and has been strengthened numerous times since then. At its core, the AKS prohibits pay-for-patient referral schemes and is designed to make sure that decisions about government-funded medical care are made on the basis of sound medical judgment and not on the basis of personal financial gain. The states have enacted similar anti-kickback laws. These laws help to reduce the costs charged to the government programs, and prevent conflicts of interest effecting patient care.
Both federal and state laws prohibit health care providers who participate in government sponsored programs such as Medicare or Medicaid from having a financial interest in certain types of services provided to their patients. These laws are sometimes called the “Anti-Self-Referral Laws.” The most common of these laws is the federal Stark law. The purpose of the Stark law was to respond to concerns that excessive use of some services is encouraged when physicians have a financial relationship with the entities to which they refer patients.
Upcoding occurs when a provider knowingly alters the billing code for a health care service, treatment, diagnostic test or other billable item to a code for a more expensive health care service, treatment, diagnostic test or billable item than was used or medically necessary and bills the government using the code for the more expensive item.
Government healthcare programs have special reimbursement rates for groups of procedures that are typically performed together, such as laboratory tests. Manipulating or altering billing codes to maximize reimbursement from government healthcare programs like Medicare and Medicaid is a type of healthcare fraud.
The submission of a claim for health care services, treatments, diagnostic tests, medical devices or pharmaceuticals provided to a patient who either does not exist or who never received the service or item billed for in the claim is called Ghost Patient fraud and can violate the False Claims Act.
Providers and insurance companies can maximize their profits or reduce their costs by limiting the number of sick patients they have to treat to be reimbursed by the government programs or private insurance companies. When a health care provider or insurance company discriminates against enrollment by patients that they recognize as posing higher costs because they are deemed to be sicker or pose a higher risk for illnesses,
Under both Medicare and many Medicaid programs, the price these government programs pay for drugs is based on a survey of the Average Wholesale Price (“AWP”) or the sticker price for that drug. Commercial publishers of drug pricing information, such as Red Book or First DataBank, have published AWP data since 1970. The AWP data is typically obtained from the manufacturers, distributors, and other suppliers of drugs. AWP fraud occurs when pharmaceutical manufacturers falsely report inflated pricing information of their drugs as a means to induce insurance companies, drug wholesalers, pharmacists, Pharmacy Benefits Managers (“PBMs”) and Group Purchasing Organizations to purchase their drugs. This type of fraud occurs when pharmaceutical manufacturers engage in a practice commonly known as “marketing the spread.” Marketing the Spread occurs when pharmaceutical manufacturers sell the “spread” to those who purchase the drugs as a way to influence which drugs are prescribed. The spread is the difference between what the pharmacy actually pays and what the government will pay in reimbursing for the purchase of the drug, which is based on AWP. The larger the spread on a drug, the larger the profit for the health care provider or pharmacy who gets reimbursed by the government program. Pharmaceutical manufacturers engage in this practice as a means of inducing insurance companies, drug wholesalers, pharmacists, Pharmacy Benefits Managers (“PBMs”) and Group Purchasing Organizations to push their drugs not based on what is best for the patient, but rather which drug is more profitable to the entity who gets reimbursed by the government programs. These practices may violate the federal and state Anti-Kickback statutes as well as the federal and state False Claims Acts.
When healthcare providers submit bills to government healthcare programs, the forms they are required to submit to get paid include a number of certifications, including that the procedures, tests and devices were medically necessary, were actually used or performed, and were performed and used in compliance with all applicable rules and regulations. Falsifying these certifications in order to get a health care claim paid or to obtain additional business causes the government to pay more than required based on a fraudulent billing practice and can violate the False Claims Act.
These types of fraud, typically include misrepresenting facts in the application in order to secure the grant, misrepresenting research results and data; over-charging for costs and other expenses, including wages and time reported, using grant money for work outside the grant terms and misrepresenting conflicts of interest by the investigators.
Under the Affordable Care Act, any person, including a provider of services, supplier, Medicaid managed care organization, Medicare Advantage organization or PDP sponsor must report and return an overpayment from Medicare or Medicaid within 60 days after it is identified or after the date of any corresponding cost report, whichever is later. The ACA also provides that any overpayment retained after this deadline is an “obligation” to the government for purposes of the False Claims Act. Thus, Congress created False Claims Act liability for any provider that retains an overpayment for more than 60 days.