Health Care Fraud and False Claims

The US Healthcare system is forever expanding, and this creates an ever expanding opportunity to commit fraud. Medicare is a federally funded insurance program that enables millions to receive health treatment. Healthcare fraud makes health care more costly. The government relies on whistleblowers to assist in bringing forth anyone committing fraud by filing qui tam lawsuits on its behalf. Some examples of healthcare fraud are as follows:

  • Improper Financial Interest/Self-referral: There are a laws and regulations such as Federal Stark law that prevent physicians and other health care providers from having a direct or indirect financial interest in certain services provided to their patients. The Stark law generally prohibits physician (and physician immediate family) investment in and compensation arrangements with entities that perform health services to which they refer patients or from which they order goods and services paid for by Medicare. Violations of Stark can also result in a violation of Federal False Claims Act.
  • Medicare Part D Fraud: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 added the “Part D” benefit to the Medicare Program, an outpatient prescription drug benefit. It is predicted that this program will be highly targeted for fraud, including potential for claims of: duplicate billing; overcharging; enrollment fraud; and improper rebates from pharmaceutical manufacturers and wholesalers.
  • False Certification: When health care providers submit bills to an insurance company, the company requires certain certifications to accept the bill, so to speak, including potentially medical necessity, the fact that they were actually performed (this would include upcoding for a more expensive procedure than was actually performed or billing for a non-existent patient), that what was performed is compliant with health standards, etc. Fraud may be committed by submitting false certifications along with the claim to the insurance company.
  • Unbundling: Government health care programs may have special reimbursement rates for groups of procedures that are typically performed together, such as laboratory tests. One type of fraud has been to “unbundle” these procedures or tests and bill each one separately, which results in greater reimbursement than the group reimbursement rate.
  • Kickbacks/Bribes: Money paid for referrals; speaker’s fees; excessive compensation; and free or discounted travel or entertainment are some examples of ways of compensating for the referral of a patient or healthcare service, a potential violation of the Federal Anti-Kickback statute, the False Claim Act, and possibly other state or federal rules, laws, or regulations.