By its very nature, Medicare is a sitting duck for fraudulent activity. Why? Because the government pays on an honor system, requiring only electronic submission to claim for services or goods provided by a health care provider.

This simple procedure was designed into the system to speed payments to doctors who would treat the poor and needy when the program rolled out in 1965.

However, it wasn’t long before criminal minds discovered the bonanza this lack of oversight afforded them.

No built-in checks and balances or due diligence exists to protect the Medicare giant from the onslaught of devious and criminal elements ever seeking new ways to rob from the Medicare giant’s piggybank.

It is only when the fraud is large or blatant enough that the government and Medicare will try to recover their funds.

Medicare whistleblowers help stop fraud

It is because of this rampant and raging fraud that the whistleblower provisions of the False Claims Act (FCA) play such a vital role in fighting these fraudsters.

The FCA’s whistleblower provisions allow a citizen when she has detected what she believes to be fraud against the federal government to initiate a lawsuit on behalf of the federal government.

This suit is sealed for 60 days to allow the government to study its merits and decide if it will join the case, or let the lawsuit initiator proceed on her own.

In any case, the law provides for the citizen who initiates such a lawsuit. She will be eligible to receive from 10 to 30 percent of any funds recovered or fines levied against defendants found guilty of the charges.

The US Department of Justice (DOJ) Report on Health Care Fraud for the fiscal year 2010 stated that the US Treasury’s largest return for the year came from health care fraud cases.

The Department scored 1,116 new criminal health care fraud investigations and initiated 942 new civil cases related to the fraud. Even still, the DOJ had over 1,200 civil cases still pending.

Much of this success can be directly attributed to citizen whistleblowers. Cumulatively they were awarded over $300 million for these brave acts of revealing fraud.

FCA violations tend to be grouped by the type of health care provider or facility involved.

Providers like HMO’s, physician groups, hospitals and skilled nursing facilities often include violations such as upcoding, hospice fraud and diagnosis related group fraud, to cite a few.

Providers other than hospitals and inpatient facilities are typically paid on the basis of a Medicare fee schedule. As a result many of their violations include false billing for services not needed, not ordered or not provided.

Other typical claims for this group often include duplicate billing; misrepresentation of services rendered for higher payments; Medicare kickbacks; split billing and falsification or forging of documents.

As successful as the False Claims Act has been, it has two counterpart federal laws which have also helped seal the cracks through which the fraudsters seek to rob Medicare funds.

One is the Stark Law, sometimes called the Physician Self-Referral Law.

The law states if a physician, or any immediate family member has a direct or indirect financial relationship, through ownership or compensation, with an entity that provides certain designated health services (“DHS”), that physician cannot refer patients to the entity for DHS.

The law was enacted to prevent physicians from profiting from their own referrals. The law discourages overly cozy business dealings between caretaker facilities such as hospitals, medical facilities, nursing homes and the like and referring physicians or their families.

Other violations of the Stark law include healthcare facilities compensating physicians “in kind” for referrals. Inappropriate or overpaid medical directorships, debt forgiveness, improper discounts, free office space, interest free loans and such other perks put the doctor and the facility in violation of the Stark law.

A citizen can blow the whistle on Stark law violations which can form the basis for a False Claims liability.

The second law aiding the fight against Medicare fraud is the Anti-kickback statute.

It prohibits any person or entity from “giving or taking payment to cause or reward any person for referring, recommending or arranging for federally-funded medical services”. This includes services provided under the three major federal health care programs: Medicare, Medicaid and TRICARE.

Like the Stark law, violations of the Anti-Kickback statute can give rise to False Claims Act liability.

Report Medicare fraud here.

Help stop government waste and abuse, and get rewarded for your efforts. Our attorneys have significant experience representing healthcare industry whisteblowers. Complete the secure form on this page or call 1-800-581-1790 for a free no obligation consultation with a lawyer.