Healthcare Fraud False Claims Act in 2022: All You Need to Know

Updated on August 18, 2022

Source: Mountain-Topmedia

Healthcare fraud undermines American citizens’ lives and costs over $68 billion annually. That is about 3% to 10% of US national healthcare spending

The False Claims Act is a federal regulation designed to curb abuse, fraud and eliminate national wastage of resources. 

An example of false claims can include billing a single service more than once or billing for services not offered. So, healthcare organizations can make false statements to get payments from the government. Hence, more fraud like Medicare fraud cases will bleed the nation’s healthcare to its deathbed.  

The US government is committed to eliminating fraudulent claims in the healthcare industry. 

This article highlights the status of the False Claims Act in 2022.

History of Fraud False Claims Act

The Fraud False Claim Act was a response to the plundering antics adopted by Union Army contractors and suppliers. They would sell sawdust boxes as guns and other unnecessary items to defraud the army. In response, Lincoln’s administration passed the False Claims Act in 1863. 

But it was dormant until amendments in 1986, 2009, and 2010. The amendments widened its scope and strengthened it as a government’s primary anti-fraud enforcement tool. 

Currently, the False Claims Act covers individuals and entities that the government pays. Healthcare providers, for example, seek payments from federal healthcare programs and plans. So, anyone, whether an individual or entity seeking claims from the government, is covered by the Act. 

False Claims suits can be filed in two ways: government or whistleblowers. Most of the lawsuits are filed by private parties-whistleblowers through the qui tam provision. Whistleblowers can be individuals or partners of health service providers. 

They are entitled to 15% – 30% of fraud recoveries. It is an attractive incentive for helping the government report fraud and abuse. But, it can be a risky affair. A relevant whistleblower knowledge base equips you with the right tools to file a False Claims lawsuit. 

Healthcare Fraud 

In 2021, healthcare fraud still topped as False Claims Act lawsuits and settlements. Over $5.6 billion worth of recoveries were made in fund settlement and judgment last year. 

The DoJ fraud mitigation efforts revert recovered funds to health programs like Medicare. Also, affected health programs service members are reimbursed. 

The DoJ’s firm efforts against health care fraud further prevent more false claims and losses. Also, it will deter others from contemplating cheating the system. Its efforts extend to several healthcare providers, goods, and services.

Hence, DoJ’s relentless efforts aim to keep patients safe from unnecessary and harmful medical actions. 

Let’s catch up on notable trends in the False Claims Act. 

Notable Trends in False Claims Act in 2022

Government Cases Driven by Data Analytics 

Source: Pixabay 

Whistleblowers initiated most False Claims Act (FAC) lawsuits. But, 2021 saw an increase in government-initiated lawsuits. More than 200 (25%) new FAC cases were government-initiated during the first year of the Biden administration.

Compared to the 2017 – 2020 period, the highest number of cases was 259 in 2020. The rest of the years had about 170 false claim cases each. 

The rise is attributed to the increasing use of data analytics in fraud detection and prevention. DoJ is leveraging technology to fight healthcare fraud, giving it comprehensive visibility and accurate detection of fraudulent activities. 

DoJ’s sophisticated data analytics for healthcare fraud detection and prevention can:

  • Identify fraud patterns and trends 
  • Visualize high-risk physicians and locate them by state or federal district. 
  • Visualize complex relationships between partners and beneficiaries. For example, it can determine if a physician prescribes controlled drugs that the patient will likely divert. 
  • Monitor Covid linked fraud or misconduct etc. 

We may see more FCA lawsuits brought directly by the government. The trend may also increase as the government provides more resources to run healthcare billing and transaction data analytics. 

Whistleblower Suits 

$1.6 billion of $5.6 billion arose from lawsuits filed by whistleblowers in 2021. That is 20% of the total fund settlement in 2021. Incentives paid to whistleblowers from the cases were $237 million in the same year.  

Although government-initiated lawsuits are rising, the whistleblower FAC lawsuits have significantly contributed to the new cases over the years. In 2021, it accounted for 598 new cases, with about 11 new cases weekly.  

It may still sustain its momentum behind government-driven cases going forward. Whistleblower lawsuits will still gain traction because most industry insiders are best placed to expose fraud. Yet, they put their careers on the line protecting taxpayers’ resources. 

But the $1.6 billion incentives given out last year may encourage more heroic whistleblowers to come forward. Hence, whistleblowers’ FAC lawsuits will be part of new cases despite being on a declining trend. 

Medicare Advantage Program 

The DoJ also prioritizes investigations into another Medicare service known as the Medicare Advantage program. The program, also known as Medicare Part C, pays a fixed amount per patient to private health insurance firms’ beneficiaries. 

With over 26 million Medicare Part C enrolled beneficiaries in 2021, CMS would have to pay over $340 billion to private health insurers. Some private insurers used dubious means to solicit payments. Here are some of the companies that were implicated and paid settlements:

  • Shutter Health paid $90million for allegations of inflating payments through unsupported diagnosis codes. 
  • Kaiser Foundation Health Plan of Washington paid $6.3 million for submitting invalid diagnoses inflating claims from the Medicare Part C program. 

DoJ could still direct more attention to the Medicare Advantage program in 2022. With about $350 billion claims made last year, it will receive more scrutiny than ever. 

Cyber Fraud Initiative Cases

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Source: Piqsels

The department launched a new Cyber Fraud Initiative to respond to cyber threats that undermine or facilitate false claims. The first case new initiative led to a settlement in March 2022. 

The Comprehensive Health Services (CHS) LLC was fined $900,000 for failing to secure medical data effectively of members of the Air Force unit in Afghanistan and Iraq. 

Hence, new cases linked to weak cyber security practices may expose more contractors and firms to face FAC lawsuits in 2022. 

Corona Virus Pandemic Fraud 

Also, fraud linked to the pandemic has gained trend in last year and may continue throughout 2022. Here are companies that have faced lawsuits and paid settlements on pandemic fraud grounds:

  • Sandeep S. Walia and his practice collectively paid $70,000 for applying for a second PPP loan and lying that he had never received a first PPP loan. 
  • Sextant Marine Consulting LLC paid $30,000 for receiving more than one PPP loan. 
  • A. Bernstein of JetReady paid $287,055 for using PPP loans to clear impermissible expenses. 

Hence, more pandemic frauds may be unearthed going forward. 

Take Away

The DoJ is stepping up to control and eliminate healthcare fraud threatening US healthcare delivery. It has adopted several approaches to achieve meet this mandate. Some are becoming trends that would stand out in 2022. 

Government-initiated FAC lawsuits account for the most significant portion of new cases followed by whistleblowers’ lawsuits. 

Individuals and entities face lawsuits to recover fraud and inflated payments submitted to them. 

But, pandemic and cyber security frauds may also affect more firms and individual physicians in 2022. 

The government is leaving no stone unturned to drain the healthcare industry of fraud and abuse in 2022. 

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.