Healthcare Employees Take Notice: Healthcare Fraud

(What You Don’t Know May Harm You)

The Department of Justice reports that approximately $3 billion is recovered yearly from fraudulent and false healthcare claims recovered under the False Claims Act. With a giant pot of money available to pay claims, it should not be surprising that the unscrupulous continually develop fraudulent schemes to unfairly claim these funds. While the list below highlights the most prominent general schemes, fraud may occur in any fashion when the biller charges the government in a misrepresentative manner.

In addition to hospitals, doctors and pharmacists, healthcare providers include the following:

Medical Transportation Companies — i.e., taxi/van service providers
Home Health Providers
Durable Medical Equipment (DME) Suppliers — i.e., wheelchairs, prosthetics, adult diapers
Nursing Homes
Medical Laboratories
Home Infusion Treatment Companies
Managed Care Organizations — PPOs, HMOs
Rehabilitation Providers

Any provider that has the ability to submit for reimbursement to the government has the ability to submit false claims. As an employee, you must be aware however that there is a co-conspirator provision within the law that ultimately could be used to find civil and criminal liability against you; even if you are unwittingly involved in the matter or not aware of the other parts of the conspiracy. Your involvement with the scheme, without reporting it to the government through your attorney, dramatically increases the chances the government will come after you when they inevitably do learn of the fraud.

The following is a list of actions that may be considered fraud:

Billing for Services Not Rendered — this is usually caught by patients. However, it is the most common type of fraud. Sometimes it will include an elaborate attempt to make it appear the service occurred. For example, injecting a patient with inert substance, or having the patient attend an appointment without any meaningful therapy.
Billing a Non-Covered Service as a Covered Service (Unbundling) — non-covered services are supposed to be paid for out-of-pocket by the patient and with patient consent. Services that are not covered cannot somehow be made to appear (via altering the charge or unbundling) as a covered service.
Misrepresenting the Service — the who, when and where make a big difference in the reimbursement rate to the biller. Doctors are reimbursed at a higher rate than other medical providers. Likewise, services over a period of time generally may be billed at a higher rate than a one-time event, and treatments administered in-office are generally billed at a higher rate than self-administered treatments.
Incorrect Reporting of Diagnoses or Procedures — providing a false diagnosis to justify unnecessary services is clearly a violation of the law and highly unethical. Likewise, misrepresenting a procedure as occurring, when in fact it did not, is also highly illegal and unethical. Unbundling, is exactly as it sounds. Some services are charged at a lower rate when bundled; and cost more when not administered together.
Overutilization of Services — often times excessive tests and diagnostics are used to excessively bill the government.
Corruption (Kickbacks & Bribery) — this occurs both between providers and their patients but between providers. Providers will exchange referrals for any number of things including cash. These relationships are not allowed however. It’s likewise illegal to provide a patient anything of value in exchange for being a patient or allowing charges on their insurance.
False or Unnecessary Issuance of Prescription Drugs — is somewhat related to number 6 but of particular importance in medicine is issuance of controlled substances, which are either used by the addicted patient or sold on the street. Some patients go so far as to allow procedures to be performed on them in exchange for keeping their supply.

As an employee in the healthcare industry, you may have witnessed acts similar to these in the past or are presently witnessing one or more of these. It should be noted that the government uses claims data to find anomalies in billing and to initiate some investigations. It may only be a matter of time before these billings are investigated. In any event, it is far better for you to be the one to come forward or cooperate with the government in its investigation.

If you find yourself in the position of needing to report false claims by your employer, please do not hesitate to contact The Schipper Law Group or call us at (248) 729-2414.