Hospice Fraud Whistleblowers
Recent hospice care fraud cases illustrate some common themes found in hospice fraud, as well as the role that whistleblowers play in uncovering fraudulent Medicare billing.
- September 2, 2014 – A hospice nurse, represented by Baum Hedlund attorney Mark Schlein, filed a whistleblower (qui tam) lawsuit in 2012 that resulted in a multimillion dollar settlement against a San Diego hospice care corporation. The whistleblower, who will receive an award that could reach $1 million, claimed in her lawsuit that San Diego Hospice admitted patients who were not eligible for hospice services.
- August 28, 2014 – The U.S. government joined a qui tam lawsuit filed by two former employees of a company that provides hospice care services across the U.S. The suit alleged that the company pressured employees and physicians to admit and retain patients who were not terminally ill and disregarded physician’s decisions that patients should be discharged.
- May 21, 2014 – The U.S. Attorney’s Office filed a complaint against a Philadelphia provider of hospice services, charging the company with submitting “false claims and records, including fabricated records, to Medicare for purported hospice care for patients who were not terminally ill, and thus not eligible for the Medicare hospice benefit.” The company also submitted false claims and records for crisis care services that were not necessary or not actually provided. (Crisis care services are meant only for patients experiencing acute medical symptoms that require immediate short-term nursing services to remain at home.) The charges were originally brought in a qui tam hospice lawsuit filed by two whistleblowers who were former employees of the hospice provider.
- April 17, 2014 – A federal grand jury returned an indictment charging an Oklahoma hospice facility with conspiring to conceal the true medical condition of its patients. The indictment alleged that medical records and nursing notes were falsified to make it appear that necessary assessments had been conducted, when they were not and to make it appear that the patients were in worse health than they actually were.
Health care fraud against the United States occurs when an individual or corporation files a claim to obtain reimbursement from the government for healthcare products or services under false pretenses. The two most visible programs vulnerable to healthcare fraud are Medicare, the government program that serves people age 65 and older, and Medicaid, which covers people with low incomes.
Tricare, a government program that provides military personnel with civilian healthcare benefits, is also a victim of false claims and fraudulent activity. Tricare enrollment is open to active service members and their families, National Guard and Reserve members, and retirees. The United States Department of Defense Military Health System administers Tricare, although the government has contracts with several large private insurance corporations to provide claims processing, administrative functions and customer service.
Healthcare Fraud and the Whistleblower
Healthcare fraud is prosecutable both criminally and civilly under the federal False Claims Act (FCA), which rewards and protects whistleblowers who file whistleblower (qui tam) lawsuits against fraudulent providers.
Recent settlements announced by the Department of Justice (DOJ) show how common and costly Medicare and Medicaid fraud is in the United States. They also illustrate the important role that whistleblowers, the FCA, and whistleblower litigation play in exposing fraud and helping the government recover fraudulently obtained payments. Here are a few examples:
- December 1, 2014 – North Atlantic Medical Services Inc. (NAMS), a Massachusetts company, agreed to pay $852,378 to resolve allegations that it violated the False Claims Act by submitting claims to Medicare and Medicaid for respiratory services provided by unlicensed personnel. The government investigation was triggered by a whistleblower lawsuit filed under the FCA by two former NAMS employees. They will split a whistleblower award of $153,428
- November 18, 2014 – The DOJ announced that the former chief operating officer of a Miami-area psychiatric hospital had pled guilty to submitting more than $67 million in fraudulent claims to Medicare for inpatient and outpatient mental health services that were not medically necessary. The hospital obtained Medicare patients by paying bribes and kickbacks to patient brokers.
- October 22, 2014 – In one of the largest recent fraud settlements, DaVita Healthcare Partners, Inc., a company that operates dialysis clinics in 46 states and the District of Columbia, paid $350 million to resolve claims that it violated the False Claims Act by paying kickbacks to physicians for referring patients to its clinics. Such payments have been made illegal to ensure that health care decisions are based only on the medical needs and interests of the patient, not financial gain for the doctor. Here again, the charges were originally brought in a qui tam lawsuit filed by a whistleblower, a senior financial analyst with the company. His award for pursuing whistleblower litigation will likely exceed $50 million.
- October 30, 2014 – Dignity Health, one of the largest hospital systems in the nation, agreed to pay $37 million to settle charges that 13 of its hospitals in California, Nevada and Arizona knowingly submitted false claims to Medicare and Tricare by admitting patients who could have been treated on a less costly, outpatient basis. The settlement resolved a lawsuit brought by a whistleblower who was former Dignity employee under the qui tam provisions of the False Claims Act (FCA). She will receive a whistleblower award of approximately $6.25 million.
Taking Legal Action
The whistleblower (qui tam) lawsuits mentioned above are authorized by a federal law known as the False Claims Act (FCA). This law permits private citizens who are aware of fraudulent activity to sue individuals or companies on behalf of the U.S. government. The Department of Justice is informed of the suit and, after its own investigation, may decide to join the action. The FCA entitles the whistleblower to receive 15 percent to 25 percent of any amount recovered through a trial or settlement reached by the DOJ. If the government does not join the lawsuit the whistleblower may still proceed individually and can receive an award of up to 30% of any successful recovery.
Whistleblowers who are considering legal action are encouraged to investigate their legal options as soon as possible. Waiting can sometimes jeopardize a case. The Baum Hedlund team is experienced in handling hospice care fraud litigation and would be happy to assist you.