Either individuals or groups of healthcare workers can participate in healthcare fraud. They misrepresent their services and overcharge the federal government.
Brad Nakase, Attorney
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At sixty-eight years old, Leslie has begun to experience chronic pain, especially in and around her hips. As a former athlete, Leslie always worried about having to get a hip replacement, and now seems to be the time. When she visits her physician, Doctor Anderson, she is not surprised when he tells her that she needs to hip replacement immediately. Leslie agrees to undergo surgery, with the understanding that her federal health insurance Medicare will cover it. When Leslie is recovering from her surgery, she discovers that Doctor Anderson performed two other procedures on her ankles and knees. She is shocked, having not agreed to those procedures. Leslie schedules an appointment with another doctor who looks at her medical records and confirms that Leslie did not need those two additional procedures. Concerned, the doctor reports Doctor Anderson to the government, triggering False Claims Act. Under the False Claims Act, a healthcare provider like Doctor Anderson cannot perform unnecessary procedures and bill the government for them. Because Doctor Anderson did so on purpose, he faces criminal charges and could lose his medical license.
Normally, a healthcare practice can submit claims to Medicare or Medicaid. These claims are bills for goods and services that are provided to patients. Federal health insurance programs such as Medicare and Medicaid cover the costs of these goods and services.
The False Claims Act has both a civil and a criminal part.
The False Claims Act’s civil component means that an individual can be found guilty of making a false claim even if he or she did not purposefully try to defraud the government. The purpose of this part of the Act is to prevent overcharging of the government.
Let’s consider an example of this. Physician A has billed a federal healthcare program for a number of medical services that he performed on a patient. However, it turns out that Physician A did not actually perform a few of the procedures, nor was he present for them being conducted. In this case, the civil FCA would be triggered, because it is possible that the physician did not mean to charge the government for all the services on the list he provided. It is quite possible that he made an error while billing, resulting in overcharging the government. Basically, it was not an intentional action.
In the example above, each service counts as a claim. This means that every false claim would result in fines. How much are these fines? They can be up to three times the federal health care program’s loss. Each filed claim can be $11,000.
The civil FCA component offers whistleblower protection. This means that a business partner, hospital staff member, patient, or competitor can report a healthcare employee for alleged false claims. The whistleblower provision in the FCA means that the whistleblower receives a percentage of the damages in the lawsuit against the practitioner.
Example: Janet is a patient of Dr. Rogers, a podiatrist. Janet schedules surgery with her doctor to treat painful bone spurs. The surgery is a success, and Janet is pleased, until she discovers the claims Dr. Rogers made in filing with Medicare. In addition to Janet’s bone spur operation, her government insurance was billed for three additional procedures which Janet did not receive. When she reports this matter, the civil FCA takes effect. It turns out that Dr Rogers’ office mistakenly billed the government for the extra three procedures. Dr. Rogers is punished for the three false claims, even though they were not intentional. He faces thousands of dollars in fines.
The criminal component of the FCA is more serious than the civil component. This is because it addresses healthcare employees who have purposefully tried to defraud the government. Therefore, the fines and punishments are more severe.
Let’s say a physician bills a government healthcare program for a series of medical services he was supposed to have provided. It turns out, however, that he made up the services and submitted the claim for reimbursement. The physician knows the claims are fake, and he never performed them or participated in them.
If the government finds the offending healthcare worker guilt of this, then he or she faces serious jail time. The U.S. law that deals with criminal penalties for acts involving federal healthcare programs (42 U.S. Code Section 1320a-7b) says that an individual can face up to ten years in prison. Not only that, but the guilty party will have to pay up to $100,000 in fines. Physicians can also lose their licenses.
Example: Dr. Smith, a dermatologist, is scheduled to perform a procedure on Mary, who has a cancerous mole. Dr. Smith knows that Mary has Medicare, and he decides that he would like a new convertible. When Dr. Smith bills Medicare for Mary’s procedure, he adds a few other similar procedures, suggesting that Mary had other problems to be taken care of. However, Mary only received the one procedure. When one of Dr. Smith’s receptionists discovers this, she reports the matter to the government, and the criminal part of the FCA is triggered. Dr. Smith is charged with falsely billing a government healthcare program. He is fined tens of thousands of dollars, loses his license, and is sent to jail for several years. Needless to say, he does not get the convertible.
Either individuals or groups of healthcare workers can participate in healthcare fraud. They misrepresent their services and overcharge the federal government. According to the U.S. Department of Justice, there are a few examples of healthcare fraud to be aware of.
A healthcare worker cannot submit a claim for a medical service that he or she did not perform. A claim may also not be submitted for tests that were not run, devices that were not used, and drugs that were not prescribed. Fines for these false claims can reach up to three times the government program’s loss.
Example: John has Medicaid. He goes to the doctor for an infection, where he receives a single diagnostic test. The doctor, however, submits a claim to Medicaid claiming that John also received other diagnostic tests that were not actually administered. Under the FCA, the doctor is fined for each test not performed.
By law, a medical professional cannot bill federal insurance companies for unnecessary medical procedures. If a doctor bills the government after performing an exam or prescribing medicine that a patient did not need, he or she could face false claim charges.
Some services need to be combined when it comes to billing. Some doctors try to defraud the government by separating the bills for multiple services that usually fall under one package.
Example: Howard visits the doctor to undergo a procedure on his knee. This type of procedure involves a few different operations, all of which fall under one package. However, the doctor decides to bill the operations separately to make them look like separate procedures, instead of components of a single procedure. The doctor is fined for defrauding the government.
If a healthcare professional creates fake documents to validate false claims, then he or she may face severe charges. These charges would fall under the criminal component of the FCA.
Example: Doctor Adams creates a false medical record for a patient, Susie, claiming that she has severe psoriasis. He uses this fake record to prescribe unnecessary steroids and perform unnecessary procedures. However, when Susie goes to another doctor for a second opinion, the doctor discovers Doctor Adams’ falsified medical records and treatment plan. Apparently, Susie only has a mild rash, not severe psoriasis. As a result, Doctor Adams faces criminal charges.
A doctor might misrepresent a patient’s diagnosis, making it look more serious than it really is. This would increase the return they get from the federal health insurance provider.
This method of fraud is similar to billing the government for goods or services that were not provided. Here, however, a doctor falsifies their entitlements to reimbursements.
Under federal law, physicians are not allowed to receive “kickbacks” for referring patients to federal health programs. Kickbacks might include money or any asset of value. An example of this would be a physician recommending that one of their patients goes to a practice that bills their services to Medicaid. That practice pays the physician for referring the patient. This behavior is illegal, and healthcare fraud.
Example: Janie goes to Dr. Howe about pain in her back. Though Dr. Howe knows how to treat Janie’s back, he recommends that she visit another physician across town, Dr. Vasquez. He tells her that Dr. Vasquez accepts Medicare, presenting this as a positive. When Janie becomes a patient of Dr. Vasquez, Dr. Howe receives a “thank you” payment from Dr. Vasquez. This money is a kickback and is illegal under the FCA.
A healthcare practitioner that attempts to defraud the government by falsifying claims can be reported by colleagues or patients. Depending on the violation, punishments and fines can be severe. If a medical practitioner is facing consequences related to the FCA, he or she should contact a lawyer for legal representation.
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