Medicare False Claims Act Penalties Archives - National Whistleblower & Government Fraud Settlement Attorney

There are many ways in which the Federal False Claims Act affects Medicare false claims cases. To understand how this happens, you need to learn what the False Claims Act is, what it covers, and how its enforcement works.

The False Claims Act, like many other piece of legislation, is complex. Interpretation is best left up to the professionals, but those who are looking to hire an attorney should familiarize themselves with the legislation and enforcement so they know what to expect.

What Is the Federal False Claims Act?

The Federal False Claims Act is a piece of legislation that assigns liability to individuals and organizations that defraud programs of the government. This Act is what the government usually uses as a legal basis when suing individuals or organizations for fraud.

It is important to note that the act contains a provision (called a qui tam provision) that allows other people to file actions on behalf of the government. Legislation calls these people “relators” but most of us know them as “whistleblowers.” This provision is very useful, as whistleblowers file a significant portion of suits brought under this Act. In fact, whistleblowers brought 70% of lawsuits. These suits recovered $27.2 billion in the period between 1987 and 2013. Many of these lawsuits related to false Medicare claims.

History of Qui Tam Laws

To understand the False Claims Act and its qui tam provision, you need to look at the history of similar legislation. This history influenced the False Claims Act during its writing and continues to influence enforcement of the Act today.
Qui tam laws date back to the Middle Ages. Specifically, they got their start in England. King Edward II offered one-third of the money recovered from corrupt government officials to those who reported them. This legal practice continued under Henry VIII, who ruled that whistleblowers, or “common informers,” could sue landowners in court for cases related to the titles of different pieces of land. A version of this law is still in force in Ireland, although England has since repealed the law.

The idea of a whistleblower bringing a lawsuit for the public good first appeared in America in the Commonwealth of Massachusetts. The penalties for fraudulent bread sales went to two parties: the person who reported the offense and the town in which the crime occurred. Other states like New York, Connecticut, Virginia, and South Carolina followed Massachusetts’ example.

The Civil War brought about the start of the False Claims Act in the United States. Due to the amounts of money spent by both the Confederate and Union governments, many people involved in the government saw an opportunity to commit fraudulent acts and enrich themselves. Congress passed the False Claims Act on March 2, 1863. As Abraham Lincoln was president at the time, some called it the “Lincoln Law.”

It is important to note that the False Claims Act contained a qui tam provision from the start. This provision is responsible for most of the lawsuits brought under the act, including most of the biggest Medicare false claims suits.

Qui Tam Laws and Medicare False Claims Suits

Up until the 1990s, most suits filed under the False Claims Act related to military spending. However, Medicare has become the focus of enforcement of the Act. The monetary value of the recoveries associated with Medicare fraud reached 40% of the total in 2008.

One of the most influential Medicare false claims suits was Franklin v. Parke-Davis, filed in 1996. The case concerned bills submitted to the Medicare/Medicaid programs by health care providers. They claimed they had provided certain treatment, when in fact, they had not.

It is interesting to note that many Medicare false claims suits filed under the False Claims Act concern the marketing of pharmaceutical companies for off-label (non-FDA-approved) usages of drugs. When Medicare pays for these prescriptions used in non-FDA-approved cases, it constitutes fraud.

Liability for Medicare Fraud under the False Claims Act

The False Claims Act establishes specific circumstances under which a person or organization can be liable for fraud against the government, including Medicare fraud. The most common circumstance is knowingly presenting a false claim for payment. Those who commit this fraud often also fabricate evidence to support their fraud, which is the second provision that often applies in Medicare fraud cases.

Find out more about how the Federal False Claims Act affects Medicare false claims cases by contacting Bothwell Law Group online. Our legal team at Bothwell Law Group has many years of experience working on Medicare false claims cases that fall under the purview of the Federal False Claims Act. This sort of experience is rare and is exactly what people involved in these cases need to seek out.

What Medicare False Claims Act Penalties Are There?

Unfortunately, Medicare is the pot of gold for several different types of fraudulent acts that carry strict penalties under the False Claims Act. There are blatant and continual scams being perpetrated. Under the Qui Tam Law, the person who brings these criminal acts to court can also be compensated if the government receives restitution from the case. Some of these include:

Billing Medicare for services that were not provided

Billing Medicare for services that were not medically necessary.

Billing Medicare for services at a standard of care/certification that was not provided to the patient

Kickbacks given for referrals of patients in Medicare

Self-referral for Medicare patients

Medicare False Claims Act Penalties: How Does This Happen?

One of the largest types of crimes with penalties under the False Claims Act is billing Medicare for services that are never actually provided. Many times this is as simple as it sounds—submitting charges for services no one performs. Often, the deception is done so overtly that the patient files have nothing to back up the charge—no orders, no notation of the patient having been seen, or no follow up. When these cases are prosecuted, they are relatively easy to prove, although direct testimony from patients is needed.

Other fraudulent billing practices include coding issues. Each medical procedure has a code that someone enters into a form for billing purposes. Often an incorrect code is entered, leading to billing for a higher cost service. Human error accounts for some mistakes, of course, but a pattern of errors points to fraud.

Many services are bundled together and given a code as a group. Another type of coding error involves unbundling these services and placing individual charges, which can be significantly higher.

Another fraud consists of bills submitted to Medicare for services that are not medically necessary, such as unnecessary tests, imaging, or equipment.

Some providers will bill Medicare for services at a higher level of care than a patient received. This violation can include charging a specialist fee without the patient consulting with a specialist or charging for an M.D. when a nurse practitioner or physician’s assistant provided the services.

Kickbacks are a widely known type of fraud in the healthcare industry. Kickbacks concerning Medicare include providers who accept payment or reward in return for soliciting Medicare recipients. Many cases involve a health care provider receiving a financial incentive for purchasing special equipment and then billing Medicare for that equipment without revealing the kickback.

Self-referrals are when a doctor refers a patient to a practice in which the doctor is an invested owner. A doctor cannot be financially benefitting from a referral. A referral is done to get a client the best health care, not to increase one’s coffers.

So, Who Actually Pays for Medicare False Claims Act Penalties?

When a fraudulent claim is brought to court and successfully prosecuted, there are penalties to be paid. The penalties are based on the number of counts of fraud, the amount of money recovered, as well as up to three times the programs’ losses.

Every single charge, every single kickback, every single misrepresentation is considered a claim. It’s easy to see how the number of claims can add up quickly. The penalty for each claim is assessed on the amount of damages to the government—in other words, the amount of money Medicare paid out for the fraudulent claims. The liable party must pay three times the amount of these costs. Also, there is a penalty assessed between $5,500 and $11,000, for each claim.

The claim is paid by the person or business found liable for the fraud by the court. It should come as no surprise to anyone that there are insurance policies available to healthcare professionals to help defray these costs. Insurance can be obtained to cover both the defense and the penalties in False Claims Act claims.

If someone is notified of False Claims Act charges, they should immediately tender notice to their insurance provider. If the provider does not tender notice as soon as possible, they are potentially forfeiting their coverage and protection.

If you are looking for more information about False Claims Act penalties and how the Qui Tam Law benefits the person who brings this type of fraud to court, call (770) 643-1606 to learn more by contacting Bothwell Law Group online.

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How Does the Federal False Claims Act Affect Medicare False Claims Cases?