What Is the False Claims Act and How Does It Affect Medicaid?

August 31st, 2018 by Mike Bothwell

Learn how the False Claims Act and Medicaid work in tandem.

the False Claims ActThe False Claims Act is well-suited to deal with current Medicaid problems. Surprisingly, the law came out of the Civil War to combat other types of government fraud. The principles still hold true today. Furthermore, the government uses them more often to prosecute businesses and individuals who attempt to defraud the government’s healthcare system.

History of the False Claims Act

While many people think of whistleblowers as a construct of the 20th century, there have always been people willing to risk it all for the greater good. Instead of expecting them to sacrifice their livelihood to ensure the safety and security of the masses, politicians decided early on these people should have special protection.

The False Claims Act is also called the “Lincoln Law.” Abraham Lincoln, the 16th U.S. President, enacted the law in 1863 to stop corruption during the Civil War. The leading minds of the time couldn’t fathom corrupt individuals living high on the hog when boys were fighting with the barest essentials.

The passing of the False Claims Act was a pivotal moment in U.S. history where the country distinguished itself and its values in a way many have forgotten today. Fortunately, the law holds and serves to protect individuals who speak out in an effort to keep the country’s resources from going to waste.

What about Qui Tam Lawsuits?

The act introduced “qui tam” lawsuits, allowing private individuals to sue those defrauding the government on the nation’s behalf. At the time, whistleblowers (known as “relators”) received half of the damages assessed by the courts. That changed in 1943, which had a drastic impact on the number of false claims reported. It also restricted qui tam eligibility to cases where the government had previous information, even when the relator was the source.

The 1940s revisions to the False Claims Act left the legislation virtually impotent against government corruption. Over the next 40 years, the gaps the changes left in accountability created a widespread problem, particularly in regard to defense contracts. During the Reagan Administration, the military came under fire for paying exorbitant amounts of money for basic items.

Scores of contractors were suspect, but investigators ran into brick walls — or rather, walls of employees too afraid to talk. Congress worked diligently to rework the False Claims Act to make whistleblowing more enticing, providing job protection, regranting qui tam eligibility for individuals who had previously informed the government of the fraud and ensuring relators received 15 – 30 percent of judgments. It’s working.

In 2015, the Department of Justice awarded a whistleblower nearly $2 million in a judgment against a children’s hospital that misstated the number of beds it had available in order to qualify for grant funding. Between repayment, penalties and fines, the government reclaimed $12.9 million.

Using the False Claims Act to Fight Medicaid Fraud Today

Medicaid is a federal and state healthcare program for low-income individuals and those with disabilities. It covers approximately 74 million people in the U.S. The complicated structure of the program leaves it ripe for fraud and other types of correction.

The most common types of Medicaid fraud committed by facilities, organizations and healthcare providers include:

  • Performing unnecessary procedures
  • Billing for procedures never performed
  • Writing unnecessary prescriptions
  • Using improper billing codes to increase fees
  • Offering referral fees or kickbacks
  • Knowingly treating the wrong person
  • Knowingly treating someone who shouldn’t qualify

The most common types of Medicaid fraud committed by patients include:

  • Providing false information on Medicaid applications
  • Altering prescriptions or requesting unnecessary medication for resale
  • Taking money from a facility or professional in exchange for unnecessary services
  • Using multiple Medicaid cards under false identities
  • Loaning Medicaid cards to those who don’t qualify for coverage

As you can see, in certain situations an individual would be able to file a suit against any number of players in the Medicaid fraud game. The Department of Justice is going after the biggest offenders, and they’re winning big.

In April, for instance, the DOJ won an $18 million settlement against Banner Health after an investigation showed four hospitals regularly provided unnecessary treatment for patients in order to increase their Medicaid bills. A whistleblower received over $3 million in the case and helped stamp out corruption that ultimately robs people of the care they deserve.

Do you have proof of Medicaid fraud? Speak out before someone else beats you to the punch.

Contact the skilled False Claims Act-Medicaid attorneys at Bothwell Law Group by clicking or calling 770.643.1606 today. We are here to help you consider your best legal options moving forward.

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