2016 Surges On With More Million-Dollar Whistleblower Recoveries

On January 12, 2016, the Justice Department announced a settlement that exemplifies what has become classic health care fraud.  Indeed, the nation’s largest Skilled Nursing Facility (“SNF”) therapy provider Kindred/Rehabcare agreed to resolve its False Claims Act (“FCA”) case with the government for $125 Million.

The government lawsuit primarily included allegations that the providers violated the FCA by knowingly causing almost 500 SNFs to submit false claims to Medicare for rehabilitation therapy services that were unreasonable, unnecessary or never even occurred.  Specifically, the patients either did not need the care, receive the care, or were on a palliative (end of life) track where rehabilitative services were absurdly improper.  As the U.S. Attorneys put it, Kindred/Rehabcare allegedly ran a systemic and broad-ranging scheme where it caused the SNFs to bill for greater Medicare reimbursement rather than the true clinical needs of the patients.  Not only did the whistleblowers end the company’s practice of achieving the highest reimbursement levels focused on boosting its profits, they also saved the American taxpayers millions of dollars.  Justifiably, the whistleblower award to the qui tam relators was $23,888,000 plus interest.

In general, the FCA is one of the government’s primary tools to combat fraud, waste, and abuse in the Medicare and state Medicaid programs.  A violation may subject the wrongdoer to substantial penalties of $5,500-$11,000 per violation plus three times the damages sustained by the government.  Although California’s FCA is modeled after the federal FCA, there are nonetheless specific particularities that demand constant monitoring.   Since 2009, the Justice Department has recovered more than $17.1 billion through FCA cases involving fraud against federal health care programs.

A “qui tam” is a type of lawsuit that gives the plaintiff (or relator) bringing the action on behalf of the government a part of the recovery with the rest going to the government payer.  With rising and more frequent monetary awards, relators are increasingly emboldened to continue reporting their company’s misdeeds, and indirectly save the taxpayers millions of dollars that would otherwise illegally remain with unethical companies.  Often in FCA claims, the defendants settle with the government and the qui tam relator for a large monetary sum, and submit to the monitoring of their services through a comprehensive compliance program called a Corporate Integrity Agreement (“CIA”).  These CIAs are listed on the Office of Inspector General website and should be extensively reviewed.  See our dedicated blogs on quit tam whistleblower litigation here.

If you witnessed any potential fraudulent activity where there is underpayment to the government, non-refunded payments to the government upon overpayment, or retaliation for blowing the whistle on corrupt government activity, prompt action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.