As many of our clients know, reporting your company’s fraudulent activity or even seemingly fraudulent actions such as over-billing for lower level services, avoiding payments owed to the government, or billing for unnecessary procedures to extract money from government programs like Medicare and Medicaid can be very rewarding. In fact, one of the main instruments used to sue for these types of activities, the False Claims Act (“FSA”) entitles those bringing these claims to 15 to 30 percent of the amount recovered in a successful FSA case. The Department of Justice stated in its annual report that qui tam whistleblowers filed 702 lawsuits in 2016.
As we reported in more detail within our Whistleblower Blogs section, drug manufacturers such as Wyeth and Pfizer Inc. paid approximately $784.6 million to settle federal and state FSA claims that Wyeth knowingly charged the government false prices on two drugs used to treat acid reflux, Protonix Oral and Protonix IV. In addition, Novartis Pharmaceuticals paid $390 million to settle claims that it gifted kickbacks to specialty pharmacies in exchange for those pharmacies using Exjade and Myfortic for kidney transplant recipients.
A large hospital system spanning multiple states, Tenet Healthcare, did not learn its lesson from a number of years ago, and settled whistleblower lawsuits to the tune of $513 million with $123 million going to the state Medicaid programs. The main allegations were that is hospitals paid kickbacks for patient referrals. Out of the recovery, the Justice Department by law is allowed to give the whistleblower between 15% to 30% which added 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.