Medicare & Medicaid Fraud


The federal False Claims Act broadly prohibits anyone who does business with the federal government from engaging in fraudulent behavior.  Accordingly, there are innumerable circumstances where such fraud may occur, and in which a Whistleblower may bring an action to expose the fraud and recover appropriate damages.  An example of such fraud includes:


In the United States, Medicare fraud is a general term that refers to an individual or corporation that seeks to collect Medicare health care reimbursement under false pretenses. There are many different types of Medicare fraud, all of which have the same goal: to collect money from the Medicare program illegitimately.  If you have information showing that a healthcare provider has committed fraud on a government healthcare program, such as Medicare or Medicaid, then you may be able to bring a qui tam lawsuit under the federal False Claims Act or similar state laws. Through the qui tam lawsuit, you would help the government recover money that has been paid as a result of fraudulent claims. Federal and state governments have recovered billions of dollars as a result of information provided by qui tam whistleblowers about fraud committed by hospitals, nursing homes, pharmaceutical companies, medical equipment/device suppliers, and physician practices.


Types of Healthcare Fraud Cases Covered By The False Claims Act

Healthcare providers who submit claims to the Medicare or Medicaid system must provide various types of information and maintain certain specified records, in order to legally claim reimbursement. If a provider submits a claim for payment to which it is not entitled, or falsifies the documentation supporting the claim, then the provider may be violating the False Claims Act. Some common forms of Medicare and Medicaid fraud include the following:


Charging For Services Or Supplies Not Provided
The most basic form of fraud that a provider can commit is to submit claims to the Medicare or Medicaid system for services or supplies that the provider did not deliver to a patient or beneficiary.


Upcoding and Unbundling
Many medical procedures and supplies are billed to Medicare or Medicaid based upon “codes.”  For example, office visits and medical procedures are often billed based upon what are known as CPT Codes.  A common form of fraud is for a Physician’s practice, hospital, or other provider to render a particular service to a patient, and use a more expensive code in order to receive a higher monetary payment when billing for these services.  This is known as “upcoding,” and is a form of fraud.  Similarly, under the governing regulations, certain groups of related services or supplies must be “bundled” and billed under a single code.  However, a provider may unlawfully obtain higher reimbursement by “unbundling” the services, and bill under multiple codes.


Falsifying or Failing to Maintain Records
Generally, Medicare and Medicaid will only reimburse a provider for services or supplies if those services or supplies are medically necessary.  Applicable regulations require providers to maintain (or in the case of medical device suppliers), to obtain various forms of documentation, such as doctors’ orders or notes demonstrating medical necessity.  If a provider or supplier either falsifies those records, or fails to maintain them as required by the regulations, then the provider or supplier may be committing fraud when it submits claims for payment to the Medicare or Medicaid system.


Off-Label Marketing By Pharmaceutical Or Medical Device Companies
Pharmaceuticals and certain medical devices must be approved by the Food and Drug Administration (FDA) before they can be sold to the public.  Medicare and Medicaid regulations provide reimbursement for pharmaceuticals and medical devices when those pharmaceuticals or devices are used in the manner approved by the FDA.  Companies that sell pharmaceuticals or devices, however, often unlawfully promote the use of their products for unapproved, or “off-label” uses, to increase profits.  This off-label marketing leads to the submission of improper claims to the Medicare and Medicaid systems.  Some of the largest healthcare fraud cases, including some cases that have settled for more than one (1) billion dollars, arose out of such off-label marketing schemes.


Unlawful Kickbacks or Financial Arrangements
A number of laws, including the Stark Law and anti-kickback laws, generally prohibit the payment of money or other financial incentives to doctors or hospitals in exchange for referrals, or for the prescription of particular pharmaceuticals or supplies.  These rules are intended to assure that doctors and other healthcare providers make decisions for their patients based solely upon medical necessity, and not because of some unlawful financial gain.  Violations of the Stark Act and anti-kickback laws can result in false claims when a provider submits a claim to Medicare or Medicaid, and the provider certifies that it has not violated these laws.  Thus, if a healthcare provider is receiving kickbacks or is involved in an unlawful financial arrangement, the provider is often violating the False Claims Act, and could be subject to a qui tam lawsuit.


Cost Report Fraud

Hospitals and certain other types of healthcare institutions are required to submit cost reports to Medicare.  These reports are used to calculate reimbursement rates under the Medicare programs. Accordingly, if a hospital manipulates its cost reports or falsifies the data in the reports, it can fraudulently obtain additional compensation in violation of the law.

Related Article

Whistleblower Complaint Alleges False Billing At Healogics
Posted in: Featured, Medicare & Medicaid Fraud | October 13, 2015

The whistleblower complaint specifically claims that a document known as a “superbill” was placed in each patient’s chart at the wound centers prior to any visits. The superbill lists all procedures and corresponding billing codes. Physicians were supposed to “check off the procedures that were allegedly, but were in many instances not, done,”according to the lawsuit. Read More »