Large Academic Medical Center Paying $6.5 Million and Medical Supply Company Paying $2.7 Million to Settle Medicare Fraud Allegations

In another multi-million dollar settlement, a health care system is paying millions to the government to settle allegations that it defrauded the Medicare program.  In the Vandebilt Hospital settlement, three formerly employed physicians claimed that the surgery center implemented fraudulent scheduling practices that violated Medicare billing regulations.  As common taking place in these cases, rather than fight the allegations, the company settles with the whistleblower and government.  In addition, the company agreed to bring in third parties to consult and evaluate the structure and effectiveness of its compliance program and operations.

As our False Claims Act (“FCA”) whistleblower attorneys report on a weekly basis, FCA Medicare and Medicaid (or in California Medi-Cal) fraud cases are on the rise as companies try to defraud the government program using unscrupulous billing practices.   Even the Trump Administration has shown its propensity to encourage FCA investigations similar to the Obama Administration.  In fact, the Trump Administration increased its fraud and abuse budget for the program by $70 million.

Another interesting settlement was by Cardinal Health which is a pharmaceutical and medical products company.  Interestingly, the government makes $5 for each $1 that it spends on FCA cases.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower will receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. 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.  See these blogs for more examples of the FCA.

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 vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.