Approximately 100 million Americans are beneficiaries of government healthcare programs, including Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), the Department of Defense’s TRICARE program, the Veterans Health Administration (VHA) program, and the Indian Health Service (IHS) program.

With all of these programs serving so many people, unscrupulous individuals often see opportunities for fraud. In fact, Industry experts estimate that 10% of all healthcare spending—hundreds of billions of dollars per year—is attributable to fraud. And because these government healthcare programs are publicly funded, when they lose money due to fraud, ordinary taxpayers have to foot the bill.

Types of Healthcare Fraud

Healthcare fraud comes in many forms, and fraudsters continue to find new ways to cheat taxpayers out of their money. However, the following types of fraud are particularly common:

  • Kickbacks: It is illegal to provide anything of value in order to induce or reward the referral of business reimbursable by federal healthcare programs. This means it’s unlawful to give someone money, gifts, free meals, or anything else of value to try to convince that person to prescribe a drug, order a diagnostic test, refer patients to a particular facility, or do anything else that would result in federal healthcare programs paying money.
  • Medical Necessity: Government healthcare programs will reimburse for goods and services only if they are medically necessary. Although it can be difficult to prove a treatment was not medically necessary, potential whistleblowers should be on the lookout for obvious signs of fraud, such as treating a patient who does not meet objective diagnostic criteria, or altering medical records to justify the provision of medical treatment.
  • Off-Label Marketing: Pharmaceutical companies are allowed to market drugs only for uses that have been approved by the FDA. These companies commit fraud when they convince healthcare providers to prescribe drugs “off-label,” for uses not approved by the FDA. This type of fraud is of particular interest to the government where the off-label use poses a danger to the patient.
  • Upcoding: Every procedure performed by a medical professional is assigned a code that is used to bill health insurance providers, including government healthcare programs. Sometimes, these professionals intentionally submit the wrong codes with their claims for reimbursement, seeking a higher amount than they are entitled to.

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Who Commits Healthcare Fraud

Nearly every participant in the healthcare industry has the opportunity to commit fraud, including:

  • Doctors and hospitals that bill the government for services tainted by kickbacks, services that are not provided, or services that are not medically necessary
  • Healthcare providers that use faulty Electronic Health Record (EHR) software to increase their reimbursements from the government, or pharmaceutical companies that pay kickbacks to EHR companies to promote certain drugs through their software
  • Hospices and Skilled Nursing Facilities that engage in upcoding or bill for services that are not provided
  • Medicare Advantage plans that submit false data to the government and receive inflated risk-adjustment payments
  • Pharmaceutical companies that engage in off-label marketing—often accompanied by kickbacks to doctors and nurses—or that provide kickbacks through Patient Assistance Programs (PAPs)
  • Laboratories and testing facilities that bill the government for services tainted by kickbacks or that were not medically necessary

Identifying Healthcare Fraud

Whistleblowers are essential in identifying, reporting, and stopping fraud in government healthcare programs. Whistleblowers are typically employees (or former employees) of a pharmaceutical or healthcare company, with inside information about fraud being committed.

For example, a pharmaceutical sales representative might have information about her company’s off-label promotion of its drugs and payment of kickbacks to physicians. A laboratory technician might learn that his company is performing diagnostic tests that aren’t medically necessary. A healthcare provider might be offered a kickback to prescribe a certain drug, or might learn that her colleagues have been offered kickbacks.

Sometimes, successful whistleblowers don’t have this type of inside information, but they still have reliable knowledge that a company or individual is engaging in fraud.

A whistleblower who files a successful complaint under the False Claims Act is entitled to between 15% and 30% of the amount the government recovers. Healthcare fraud has resulted in some of the largest False Claims Act settlements in history, with whistleblower shares as high as $167.7 million.

Coronavirus/PPP Fraud

The federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help provide economic relief to individuals and businesses in the wake of the COVID-19 pandemic. However, the trillions of dollars provided in the CARES act stirred up fraudsters looking to scam the government and taxpayers out of money. Some individuals were impersonating organizations, such as the Red Cross, and others were trying to sell fake COVID-19 test kits. Other schemes included defrauding the Paycheck Protection Program by forging loan applications and misusing funds meant to bail out small businesses. Whistleblowers are vital in the investigation and prosecution of CARES and PPP fraud cases.

Hospice Fraud

Hospice care is a form of home health care intended for terminally ill patients who can no longer receive curative treatments and are instead given palliative care to make them comfortable in their final days. Physicians determine a patient’s eligibility for hospice care and must certify that the patient’s life expectancy is six months or less. Healthcare companies commit hospice fraud by admitting patients into hospice care who are not terminally ill. The companies target patients on Medicare since hospice benefits under Medicare are some of the highest reimbursements that Medicare pays out. Some home healthcare companies have also been charged for kickback schemes. These companies paid kickbacks to marketers, doctors, and other medical staff in exchange for patient referrals. Under federal law, it is illegal for any person to knowingly solicit, offer, or pay a kickback, bribe, or rebate for furnishing services under a Federal health care program.

Pill Mills and the Opioid Epidemic

“Pill mill” is the term for any doctor, clinic, or pharmacy that prescribes or dispenses powerful drugs without a legitimate medical reason. Pill mills are fueling the opioid epidemic across the country. Retail pharmacies play a major role in the nation’s opioid crisis. In some cases, pharmacists and pharmacy managers have been pressured by their employers to fill prescriptions without evaluating their legitimacy. Pharmacists and pharmacy managers with knowledge of these irresponsible practices should come forward and speak to a whistleblower attorney.

Our Team

With more than 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of fraud against government healthcare programs.

Please call (866) 401-5971 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.  Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.