Healthcare Whistleblower Litigation Case against Physician Medical Group Settles for $124,000

The case involves a whistleblower who received $124,000 for reporting health care fraud by three physicians and a health care facility under the False Claims Act (“FCA”). The amount received by the whistleblower was approximately 20% of the total settlement paid to the federal government which amounted to $700,000. The main allegation stated that the defendants submitted claims with dishonest billing to Medicare, the federal employee health benefits program and the U.S. Department of Labor – Workers’ Compensation program.

Specifically, the billings submitted to the programs above were characterized as services performed by non-physicians as “incident to” services done by the supervising physicians. However, after the government investigated it found out that the physicians were not present during the times that the services were billed. In health care billing, “incident to” tagged services are billed at much reimbursement rates than when services are performed by non-physicians when the physicians are not present. See these other blogs for other examples of fraudulent billing FCA actions.

Interestingly, the whistleblower used the FCA’s Qui Tam rules which allow private citizens to sue on behalf of the government. Here, because she reported what she believed were false billing practices and the government sued, she was entitled to receive part of the amount that the government recovered. These types of whistleblower, or Qui Tam, lawsuits may be brought by individuals, clients, competitors or vendors who then become “relators.” These relators are then suing on behalf of the government and in return the government compensates the relators for speaking up against violating companies. Out of the recovery, the Justice Department by law is allowed to give the whistleblower between 15% to 30%, which can add up to millions of dollars. What changes these percentages is whether the government intervened/joined the lawsuit which means the relator will not have to expend as much time and effort. If the government selects not to intervene, the whistleblower and his or her attorney are entitled to a much higher amount of around 25-30% of the recovery. If the government intervenes, then the whistleblower is entitled to 15-25% of the recovery.

Most often, the FCA is used within the health care industry to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when a provider of health care services such as a doctor or hospital bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services. In addition, health care companies are often fount to illegally bill the government for substandard services by fraudulently using higher diagnostic codes or by falsely certifying the medical necessity of medical procedures. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame. At that point, the nonpayment becomes a false claim. To combat retribution for filing FCA claims, the Health and Safety Code Section 1278.5 prohibits retaliation against patients, physicians, nurses and medical staff who whistleblow to the government or its agencies on patient care issues at a health care facility.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is crucial. Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.