Medicare Fraud: Information for Whistleblowers

Medicare, a federally funded health insurance program, provides coverage primarily to individuals aged 65 and older, younger individuals with specific disabilities, and people diagnosed with end-stage renal disease. Given its federal funding, all healthcare providers who receive Medicare payments must adhere to stringent federal and state laws and regulations.

Unfortunately, Medicare fraud is a persistent issue, leading to billions of dollars in losses each year from fraudulent claims. This has prompted the enforcement of severe financial and legal consequences for anyone found guilty of submitting false claims.

For whistleblowers, stepping forward to report suspected fraud not only helps protect taxpayer dollars but also safeguards the well-being of patients who may be impacted by unethical practices. Whistleblowers play a critical role in maintaining the integrity of the healthcare system, and their courage can drive significant change.

Types of Medicare Fraud

Fraudulent use of federal Medicare funds not only burdens taxpayers but can also have detrimental effects on patient care. Common examples of Medicare fraud include:

• Billing for Services Not Rendered: Submitting claims for medical procedures or services that were never provided to the patient.
• False Billing for Prescriptions or Equipment: Charging Medicare for medications or medical equipment that the patient never received.
• Upcoding or Bill Padding: Altering billing codes to increase the reimbursement amount, such as claiming a more complex and expensive procedure than was performed.
• Unnecessary Medical Testing: Referring patients for tests or procedures that are not medically necessary, solely to generate more income for the clinic.
• Receiving Kickbacks: Accepting illegal payments or incentives from suppliers or healthcare facilities in exchange for patient referrals or use of specific products.
• Telehealth Fraud: Charging Medicare for virtual consultations or telehealth appointments that never actually occurred.
• Administering Unnecessary Treatments: Providing medical treatments that are not needed, often for financial gain.

Understanding and identifying these types of fraud is critical for protecting both patient welfare and public funds.

Steps to Take if You Suspect Medicare Fraud

If you believe Medicare fraud is occurring, your first course of action should be to consult with a qualified Medicare fraud attorney. Filing a lawsuit under the False Claims Act (FCA) is a serious and complex process, and once you take this step, you will be considered a whistleblower. It is crucial to maintain confidentiality and discuss the matter only with your attorney, who will guide you through the legal process and ensure your rights are protected.

Your attorney will advise you on how to proceed, including whether or not you need to collect evidence legally for the case. In some instances, your attorney will handle all aspects of evidence gathering to ensure compliance with legal requirements. It is essential to follow the steps outlined by your legal counsel to build a strong case.

Moreover, whistleblowers may be eligible for financial rewards. An experienced attorney will explain the potential for reward money and discuss the legal implications involved. Above all, by coming forward, you are helping to put an end to fraudulent activities that could endanger vulnerable patients and misuse public funds.

Whistleblower Rewards and Protections

Whistleblowers who report Medicare fraud under the qui tam provisions of the False Claims Act (FCA) may be eligible to receive a percentage of the recovered funds. In successful cases, this reward typically ranges from 15% to 30% of the total amount recovered. Your attorney will be able to provide a clearer understanding of the specific reward you may be entitled to, based on the details of your case.

Additionally, both state and federal laws provide robust protections for whistleblowers. The FCA, at the federal level, explicitly prohibits employers from retaliating against employees who report fraud. This means that whistleblowers are protected from being fired, demoted, or harassed. If an employer does retaliate, the whistleblower has the right to file a lawsuit seeking compensation for damages. Given the complexity and high stakes involved, it is crucial to consult with an experienced attorney immediately if you suspect Medicare fraud to ensure your rights are protected and the situation is handled properly.

Recent High Profile Medicare Fraud Cases

In recent years, several high-profile Medicare whistleblower cases have highlighted the serious financial impact of fraudulent schemes and the substantial penalties associated with these crimes.

One notable case involved a California man who was sentenced to 10 years in prison for fraudulently billing Medicare approximately $234 million for various lab tests, despite being barred from participating in Medicare due to prior convictions in 1990 and 2001. Following these earlier convictions in New York and California, he had been explicitly prohibited from engaging in Medicare or Medicaid activities. Despite these bans, he continued to commit fraud. In addition to his prison sentence, he was ordered to forfeit over $31 million, along with two residential properties and one business property.

Another significant case took place in Florida, where a businessman was ordered to pay $27 million for billing Medicare for cancer genomic testing that was medically unnecessary. The man owned the diagnostic laboratory responsible for the fraudulent billing, making him directly accountable for the violations.

A Pennsylvania pharmacist was also implicated in Medicare fraud, submitting false claims to Medicare Part D, which covers prescription medications. The investigation revealed that the claims were based on orders for drugs that were never filled or provided to patients. The pharmacist pleaded guilty and was sentenced to 15 months in prison, in addition to being required to pay $166,000 in restitution.

A broader investigation known as “Operation Brace Yourself” in 2019 uncovered a massive $1.2 billion fraud scheme involving healthcare and telemedicine executives. The group had billed Medicare for medical equipment that was never delivered to or used by patients, leading to widespread criminal charges.

One of the most egregious cases occurred in Michigan in 2014, involving Dr. Farid Fata, who was convicted of administering unnecessary chemotherapy treatments to over 500 patients who did not have cancer. Medicare paid out $34 million in fraudulent claims resulting from his actions, which caused immense harm to the affected patients. Dr. Fata’s case remains a sobering example of the devastating consequences of healthcare fraud.

These cases underscore the crucial role of whistleblowers in exposing fraud and protecting the integrity of the Medicare system, as well as the severe repercussions faced by those who engage in fraudulent activities.