Health care fraud

Last updated

Health care fraud includes "snake oil" marketing, health insurance fraud, drug fraud, and medical fraud. Health insurance fraud occurs when a company or an individual defrauds an insurer or government health care program, such as Medicare (United States) or equivalent State programs. The manner in which this is done varies, and persons engaging in fraud are always seeking new ways to circumvent the law. Damages from fraud can be recovered by use of the False Claims Act, most commonly under the qui tam provisions which rewards an individual for being a "whistleblower", or relator (law). [1]

Contents

Recent news and statistics

The FBI estimates that Health Care Fraud costs American tax payers $80 billion a year. [2] Of this amount $2.5 billion was recovered through False Claims Act cases in FY 2010. Most of these cases were filed under qui tam provisions.

Over the course of FY 2010, whistleblowers were paid a total of $307,620,401.00 for their part in bringing the cases forward. [3]

Federal Statute

Under federal law, health care fraud in the United States is defined, and made illegal, primarily by the health care fraud statute in 18 U.S.C.   § 1347 states [4]

(a) Whoever knowingly executes, or attempts to execute, a scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.
(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.

Types

There are several different schemes [5] used to defraud the Health care system.

Billing for services not rendered

Often done as a way of billing Medicare for things that never happened. This can involve forging the signature of those enrolled in Medicare, and the use of bribes or "kickbacks" to corrupt medical professionals. [5]

Upcoding of services

Billing Medicare programs for services that are more costly than the actual procedure that was done. [5] It is a form of billing fraud where healthcare service providers submit false billing codes to obtain higher reimbursement at the expense of programs like Medicare, Medicaid, and TRICARE. [7]

Upcoding of items

Similar to upcoding of services, but involving the use of medical equipment. An example is billing Medicare for a power-assisted wheelchair while only giving the patient a manual wheelchair. [5]

Duplicate claims

In this case a provider does not submit exactly the same bill, but changes some small portion like the date in order to charge Medicare twice for the same service rendered. Rather than a single claim being filed twice, the same service is billed two times in an attempt to be paid twice. [5]

Unbundling

Bills for a particular service are submitted in piecemeal, that appear to be staggered out over time. These services would normally cost less when bundled together, but by manipulating the claim, a higher charge is billed to Medicare resulting in a higher pay out to the party committing the fraud. [5]

Excessive services

Occurs when Medicare is billed for something greater than what the level of actual care requires. This can include medical related equipment as well as services. [5]

Unnecessary services

Unlike excessive services, this fraudulent scheme occurs when claims are filed for care that in no way applies to the condition of a patient, such as an echo cardiogram billed for a patient with a sprained ankle. [5]

Kickbacks

Kickbacks are rewards such as cash, jewelry, free vacations, corporate sponsored retreats, or other lavish gifts used to entice medical professionals into using specific medical services. This could be a small cash kickback for the use of an MRI when not required, or a lavish doctor/patient retreat that is funded by a pharmaceutical company to entice the prescription and use of a particular drug. [5] Other forms of payment that could be illegal kickbacks include paid speaking positions at events, consulting contracts, and research grants. [8]

People engaging in this type of fraud are also subject to the federal Anti-Kickback statute.

Examples

In the case United States ex rel. Donigian v. St. Jude Medical, Inc., No. 06-CA-11166-DPW (D. Mass.) St. Jude Medical, Inc. agreed to pay $16 million to quiet allegations of paying kickbacks to physicians. The whistleblower was able to provide detailed insider information as to the nature of the kickbacks, which ranged from entertainment to sporting event tickets and other gifts. The relator in this case was awarded $2.64 million.[ citation needed ]

The case United States et al., ex rel. Jim Conrad and Constance Conrad v. Forest Pharmaceuticals, Inc, et al., No. 02-cv-11738-NG (D. Mass.) involved a drug manufacturer selling a drug, Levothroid, that had never been approved by the FDA. These allegations settled for $42.5 million due to multiple whistleblowers stepping forward to provide detailed information on the alleged fraud. The collective reward to the relators in this case was over $14.6 million.[ citation needed ] [9]

Copied and pasted entries into the Electronic Medical Record may constitute fraud. A U.S. Department of Veterans Affairs, Veterans Health Administration pulmonologist at the Montgomery, Alabama facility copied and pasted data entered by other physicians into electronic medical records that he signed. The VA Office of the Medical Inspector reported this finding to Congress in 2013.

In the UAE, some doctors and hospital managers have done a lot of fraud. They conduct unnecessary surgeries so that they can make extra money. [10] [11]

In the case United States ex rel. Brown v. Celgene Corp., CV10-3165, drug company Celgene agreed to pay $280 million on the eve of trial. [12] The settlement resolved allegations that the company marketed and sold cancer drugs Thalomid and Revlimid for non-FDA approved uses. [13]

In the case US v. Javaid Perwaiz, former OBGYN Perwaiz, a gynecologist from Pakistan and in Virginia, performed unnecessary surgeries on women. He was charged with 26 counts of health care fraud, 33 counts of false statements related to health care matters, 3 counts of aggravated identity theft, and 1 count of criminal forfeiture-health care fraud. [14] He faced a maximum of 539 years (6,648 months) if convicted of all counts. [15] The jury found him guilty of 23 counts of health care fraud and 30 counts of false statements related to health care matters. [16] He faced 475 years. That would give him 10 years for 13 health care fraud counts and 20 years for 10 others because those 10 others resulted in serious bodily injury, and 5 years for false statements related to healthcare matters. When prosecutors asked for 50 years, they returned with 9 more. [17] According to Federal Bureau of Prisons, Perwaiz is currently incarcerated at FCI Cumberland Camp and his release date is February 16, 2070.

Reporting fraud

There are many ways to report cases of fraud. If a patient or health care provider believes they have witnessed Health Care Fraud, they are encouraged to contact the FBI via either their local office, telephone, or the online tips form.

If, however, they want to ensure the government actively investigates the alleged fraud, they are encouraged to contact legal counsel from an experienced firm that specializes in qui tam litigation under the False Claims Act. A good legal team can advise potential whistleblowers of their rights, protections, and what evidence is necessary to solidify a case against the group leading the fraud.

See also

Related Research Articles

<span class="mw-page-title-main">False Claims Act of 1863</span> United States federal anti-fraud law

The False Claims Act of 1863 (FCA) is an American federal law that imposes liability on persons and companies who defraud governmental programs. It is the federal government's primary litigation tool in combating fraud against the government. The law includes a qui tam provision that allows people who are not affiliated with the government, called "relators" under the law, to file actions on behalf of the government. This is informally called "whistleblowing", especially when the relator is employed by the organization accused in the suit. Persons filing actions under the Act stand to receive a portion of any recovered damages.

In common law, a writ of qui tam is a writ through which private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the prosecution. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning "[he] who sues in this matter for the king as well as for himself."

<span class="mw-page-title-main">Omnicare</span> American health care company

Omnicare is an American company working in the health-care industry. It was established in April 1981 as a spinoff of healthcare businesses from Chemed and W. R. Grace and Company. It is currently a pharmacy specializing in nursing homes. In 2015, Omnicare was acquired by CVS Health.

In the United States, Medicare fraud is the claiming of Medicare health care reimbursement to which the claimant is not entitled. There are many different types of Medicare fraud, all of which have the same goal: to collect money from the Medicare program illegitimately.

The ethics involved within pharmaceutical sales is built from the organizational ethics, which is a matter of system compliance, accountability and culture. Organizational ethics are used when developing the marketing and sales strategy to both the public and the healthcare profession of the strategy. Organizational ethics are best demonstrated through acts of fairness, compassion, integrity, honor, and responsibility.

James Hoyer, P.A. is a Tampa, Florida-based law firm that focuses on whistleblower cases as well as consumer class action lawsuits. In 2015, the firm was named Whistleblower Lawyers of the Year by the Taxpayers Against Fraud Education Fund.

Adam B. Resnick is an American health care entrepreneur, public speaker, author, and professional whistleblower.

Shasta Regional Medical Center, formerly known as Redding Medical Center and Memorial Hospital, is a general acute care hospital that is located in Redding, California. It opened in 1945 and currently has 226 beds with a basic emergency department.

A case of Medicaid fraud was carried out in 2010 by an Armenian-American organized crime group called the Mirzoyan–Terdjanian organization. The scam involved a crime syndicate which created 118 fake clinics in 25 states and used stolen medical license numbers of real doctors and matched them to legitimate Medicare patients whose names and billing information were also stolen. The group submitted more than $163 million in claims and received $35 million of that before they were caught. Prosecutors charged 73 individuals in several states with allegations of racketeering conspiracy, bank fraud, money laundering and identity theft.

Pharmaceutical fraud is when pharmaceutical companies engage in illegal, fraudulent activities to the detriment of patients and/or insurers. Examples include counterfeit drugs that do not contain the active ingredient, false claims in packaging and marketing, suppression of negative information regarding the efficacy or safety of the drug, and violating pricing regulations.

<i>United States v. GlaxoSmithKline</i>

United States v. GlaxoSmithKline was a case before the United States District Court for the Eastern District of Pennsylvania. Robert J. Merena was one of the first who filed claims against SmithKline Beecham Clinical Laboratories on November 12, 1993. The complaints alleged that GlaxoSmithKline, which operated a system of clinical laboratories, adopted myriad complicated procedures for the purpose of defrauding state and federal healthcare programs, in particular Medicare and Medicaid. The U.S. Justice Department publicly praised Robert Merena for his "cooperation and support" in helping the government collect the largest settlement ever involving a whistle-blower lawsuit. The SmithKline settlement is considered to be one of the largest whistleblower assisted recoveries in the history of the United States.

<i>Franklin v. Parke-Davis</i> 1996 lawsuit

Franklin v. Parke-Davis is a lawsuit filed in 1996 against Parke-Davis, a division of Warner-Lambert Company, and eventually against Pfizer under the qui tam provisions of the False Claims Act. The suit was commenced by David Franklin, a microbiologist hired in the spring of 1996 in a sales capacity at Parke-Davis, a pharmaceutical subsidiary of Warner-Lambert. In denying the defendants' motion for summary judgment, the court for the first time recognized off-label promotion of drugs could cause Medicaid to pay for prescriptions that were not reimbursable, triggering False Claims Act liability. The case was also significant in exposing the degree to which publication bias impacts the randomized controlled studies conducted by pharmaceutical companies to test the efficacy of their products. Ultimately, the parties reached a settlement agreement of $430 million to resolve all civil claims and criminal charges stemming from the qui tam complaint. At the time of the settlement in May 2004, it represented one of the largest False Claims Act recoveries against a pharmaceutical company in U.S. history, and was the first off-label promotion settlement under the False Claims Act.

<span class="mw-page-title-main">Reuben Guttman</span> American attorney

Reuben A. Guttman, born 1959 in New York City, is an American attorney and a founding Partner of Guttman, Buschner & Brooks PLLC ("GBB"), a DC-based plaintiffs' firm His practice involves complex litigation and class actions. He has served as counsel in some of the largest recoveries under the False Claims Act. The International Business Times has called Guttman "one of the world's most prominent whistleblower attorneys," and he has been recognized as a Washingtonian Top Lawyer by Washingtonian Magazine.

<span class="mw-page-title-main">Medicare Fraud Strike Force</span>

The Medicare Fraud Strike Force is a multi-agency team of United States federal, state, and local investigators who combat Medicare fraud through data analysis and increased community policing. Launched in 2007, the Strike Force is coordinated by the United States Department of Justice and the Department of Health and Human Services. It combines the data-analysis capabilities of the Centers for Medicare and Medicaid Services, the investigative resources of the FBI, and the prosecutorial resources of the Department of Justice and the U.S. Attorneys' Offices.

IPC Healthcare, Inc., previously known as IPC The Hospitalist Company, was a publicly traded corporation which operates a national physician group practice focused on the delivery of hospital medicine and related facility-based services. IPC providers manage the care of patients in coordination with primary care physicians and specialists in over 1,900 facilities in 28 states across the U.S. The company name is derived from an earlier company called In-Patient Consultants Management, Inc. and the NASDAQ ticker name was changed to IPCM in 2008. The company changed its name to IPC Healthcare in January 2015. The company was acquired by TeamHealth in 2015 for $1.6 billion.

Farid Tanios Fata is a Lebanese-born former hematologist/oncologist and the mastermind of one of the largest health care frauds in U.S. history. Fata was the owner of Michigan Hematology-Oncology (MHO), one of the largest cancer practices in Michigan. He was arrested in 2013 on charges of prescribing chemotherapy to patients who were healthy or whose condition did not warrant chemotherapy, then submitting $34 million in fraudulent charges to Medicare and private health insurance companies over a period of at least six years.

<span class="mw-page-title-main">DaVita</span> American dialysis provider

DaVita Inc. provides kidney dialysis services through a network of 2,675 outpatient centers in the United States, serving 200,800 patients, and 367 outpatient centers in 11 other countries serving 49,400 patients. The company primarily treats end-stage renal disease (ESRD), which requires patients to undergo kidney dialysis 3 times per week for the rest of their lives unless they receive a kidney transplant via organ donation. The company has a 37% market share in the U.S. dialysis market. It is organized in Delaware and based in Denver.

The Anti-Kickback Statute (AKS) is an American federal law prohibiting financial payments or incentives for referring patients or generating federal healthcare business. The law, codified at 42 U.S. Code § 1320a–7b(b), imposes criminal and, particularly in association with the federal False Claims Act, civil liability on those who knowingly and willfully offer, solicit, receive, or pay any form of remuneration in exchange for the referral of services or products covered by any federal healthcare program, subject to certain narrow exceptions. In other words, the statute covers both those who provide kickbacks and those who receive kickbacks. The statute is among the most important healthcare fraud and abuse laws in the United States. Violation of the AKS is a felony.

References

  1. ↑ "Department of Justice". Department of Justice. 18 March 2015.
  2. ↑ "FBI-Health Care Fraud". FBI.
  3. ↑ "The Department of Health and Human Services and The Department of Justice; Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2010" (PDF). January 2011. Archived from the original (PDF) on 2015-08-24. Retrieved 2014-11-14.
  4. ↑ "U.S. Code › Title 18 › Part I › Chapter 63 › § 1347 - Health care Fraud". Cornell Law School Legal Information Institute.
  5. 1 2 3 4 5 6 7 8 9 "Financial Crimes to the Public Report 2006". FBI. 2006.
  6. ↑ VA inspector says Alabama doctor's acts may be insurance fraud. USA TODAY NETWORK Mary Troyan. Montgomery Advertiser July 29, 2014. http://usat.ly/1mYBGqf
  7. ↑ "Upcoding in Healthcare | Report Healthcare Fraud". Brown, LLC. Retrieved 2024-06-07.
  8. ↑ "What is a kickback?". Whistleblowerlaws. 3 December 2015.
  9. ↑ "Drug Maker Forest Pleads Guilty". Department of Justice. 2010-09-15.
  10. ↑ Loy Machedo (3 January 2019). "SHOCKING REPORT- Ex-UAE Doctor Confesses What Happened In UAE Hospitals" – via YouTube.
  11. ↑ "Billions lost in health care fraud and waste". The National.
  12. ↑ "Successes". GBBLegal.
  13. ↑ "Celgene Agrees to Pay $280 Million to Resolve Fraud Allegations". Department of Justice. 25 July 2017.
  14. ↑ "United States v. Javaid Perwaiz". US Department of Justice. August 22, 2021. Retrieved August 22, 2021.
  15. ↑ "Jury deliberations continue in the Javaid Perwaiz case". WVEC-TV. August 22, 2021. Retrieved August 22, 2021.
  16. ↑ "Former Virginia doctor Javaid Perwaiz guilty of health-care fraud, performing unnecessary hysterectomies". The Washington Post . August 22, 2021. Retrieved August 22, 2021.
  17. ↑ "Former Chesapeake OB/GYN Sentenced to 59 Years in Prison". US Department of Justice. August 22, 2021. Retrieved August 22, 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.