Articles Posted in Whistleblower Lawsuits

Ensign Group Inc., which runs nursing homes in a number of US states, has consented to pay $48 million to settle Medicare billing fraud allegations that it billed the government for medical procedures that patients didn’t need. The case stems from whistleblower cases brought by Carol Sanchez and Gloria Patterson, two ex-employee therapists who claimed that the nursing home operator conducted rehabilitation therapy that was not always necessary at six of its facilities. The government believes that Medicare fraud took place at Ensign Group facilities from 1999 to 2011. According to the US Department of Justice, Ensign Group provided the therapy to up its Medicare reimbursement.

One whistleblower lawsuit accused Ensign of promoting fraudulent billing by establishing Medicare billing goals that were not reasonable and giving rewards, such as all-expense paid vacations, to employees who met these objectives. The Medicare fraud attorney of one of the plaintiffs said that the only way to meet these goals was to cheat Medicare. As a result, Ensign staff purportedly billed more than the care that was actually provided/needed by patients to meet the incentive goals.

Ensign Group says that even though it is settling, the company never took part in any illegal behavior. It says that it is choosing to resolve the claims to avoid litigation.

Three doctors are suing Vanderbilt University Medical Center for Medicare fraud. They submitted their whistleblower lawsuit under the False Claims Act’s qui tam provision.

The plaintiffs, all ex-VUMC anesthesiologists, are accusing the medical center of taking part in a scam involving the use of its medical practices to maximize income through the submission of false claims to state and federal health insurance programs, even though it knew that the doctor services they were billing for did not satisfy Medicare’s terms for these services. The Mediare fraud lawsuit contends that these false billing practices went on for over 10 years.

Federal law only lets hospitals bill Medicare and state insurance programs for “teaching physician services” if the teaching doctor was there during key portions of the procedure. During surgeries, the teaching physicians has to be there for the “critical” moments, as well as easily and immediately available in the event that his/her services are required at any other time during the procedures.

According to a whistleblower lawsuit, Quest Diagnostics and Laboratory Corporation of America Holdings committed Medicaid fraud by billing the program in Virginia a higher rate than other customers. Quest is the largest operator of medical labs in the United States.

Hunter Laboratories LLC and its CEO Chris Riedel submitted the whistleblower complaint. They contend that the two companies submitted false claims for payment of laboratory tests that were Medicaid covered by falsely presenting that the fees charged were not any higher than the maximum payable under regulations in Virginia, where the program was located. The plaintiffs claim that Quest billed Medicaid up to $10.42 for an automated hemogram, even though others were billed as little as $1.42 for the common blood test.

The Medicare fraud lawsuit is accusing LabCorp. of billing Medicaid fees way over what Premier Inc. purchasing collective members were charged. Riedel and Hunter have also filed fraud claims against the two companies in Georgia.

Shands Hospitals will pay $26 million to settle a Medicaid/Medicare fraud case accusing it of admitting patients that didn’t require hospitalization to six of its facilities. A whistleblower claim submitted in 2008 claimed that the company overbilled Medicaid and Medicare with the admissions.

The Medicare/Medicaid fraud lawsuit accuses Shands of billing the two programs for short overnight inpatient admissions instead of outpatient services, which are less costly. The $26 million, however, settles just part of the allegations. Claims that the hospitals turned in fraudulent outpatient service bills are still pending.

The person that brought the whistleblower lawsuit, Terry Myers, was as an independent consultant by Shands to audit its health system billing practices several years ago. Shands said that there was system failure and serious insufficient management oversight to abide by Medicaid/Medicare regulations.

The US Department of Justice and 55 hospitals have reached a $34M Medicare fraud settlement accusing 55 hospitals in 21 states of engaging in making false claims for kyphoplasty procedures. The allegations were brought under the False Claims Act by whistleblowers, who will receive about $5.5 million from the settlements reached. Two of the hospitals involved are located in Massachusetts. They are the New England Baptist Hospital in Boston and St. Anne’s Hospital in Fall River.

Kyphoplasty is a procedure for treating spinal fractures frequently caused by osteoporosis. It involves using a balloon device to work with the compressed vertebra and then injecting bone cement into the cavity after the balloon is taken out. The treatment usually requires just a few hours of recovery and is generally an outpatient procedure.

According to the government, the hospitals regularly billed Medicare for this minimally invasive procedure on a more expensive, inpatient basis.

The US Justice Department says that US Renal Care will pay $7.3 million to settle allegations that its Dialysis Corporation of America submitted false Medicare claims, billing more for Epogen, an anemia medication, than what it actually gave to dialysis patients. The accusations stem from a Qui Tam lawsuit filed by whistleblower Laura Davis.

DCA, which has over 100 outpatient dialysis clinics, is accused of billing Medicare not only for the amount of Epogen used by patients but also for the overfill that was left in the vials. The company purportedly didn’t do anything to use this excess and there was even a time when reimbursement for Epogen purportedly made up over 25% of the company’s revenue for medical services.

Davis, a nurse who worked at a DCA clinic, filed her whistleblower lawsuit in 2008. She claims that she first reported the billing discrepancies to the company but that no one paid attention to her. Under the False Claims Act’s qui tam provisions, Davis is entitled to a percentage of the multimillion-dollar recovery. The DOJ says that she will receive $1,314,000.

Examples or Medicare billing fraud:
• Billing for medical services never provided • Conducting medical tests the patient needs and billing Medicare for them • Billing twice for the same equipment or services • Upcoding: billing for a more expensive service than what was actually provided to a patient • Unbundling: Billing separately for certain services that are typically done together and can be billed collectively and at less of a cost
Massachusetts False Claims Act
The state has its own False Claims Act that offers whistleblowers financial incentives for reporting fraud. Recently, certain amendments were made to the Act to further encourage people to come forward and report fraud abuse. For example, now a court can no longer eliminate or lower the percentage a successful whistleblower can get. Also, a whistleblower now doesn’t have to be the “original” source of the fraud information. Additional information to the knowledge that is already in the public domain will suffice.

U.S. Renal Care to Pay $7.3 Million to Resolve False Claims Act Allegations, DOJ, May 21, 2013
Update: Whistleblower allegations about Medicare fraud led to $7.3 million settlement, The Dallas Morning News, May 22, 2013

More Blog Posts:
Nursing Home to Pay $2.7M for Medicaid Fraud Claims Brought to Light By Whistleblower, Boston Injury Lawyer Blog, March 23, 2013
Generic Drug Manufacturer Ranbaxy Will Pay $500M To Settle in False Claims Act and Whistleblower Allegations Involving Medicaid/Medicare Fraud & Pharmaceutical Fraud, Drug Injury Lawyer Blog, May 14, 2013 Continue reading

Grace Healthcare LLC will pay $2.7M with interest to resolve fraud violations that it either knew of or caused their submission related to the Medicare and TennCare/Medicaid programs. The allegations were reported in a whistleblower lawsuit filed by one of the nursing home manager’s former employees, who will now receive $405,000 per the Qui Tam provisions of the act, which not only lets private citizens sue for Medicare and Medicaid fraud on the US government’s behalf but also allows them to receive a percentage of any recovery.

By settling, Grace Healthcare is not denying or admitting to the allegations. The US Justice Department, however, says that the nursing home company turned in false claims for rehabilitation services that were not medically necessary or reasonable, including occupational, physical, and speech therapy services that were provided at 10 facilities to fulfill their Medicare revenue goals, which were purportedly determined without factoring the patients’ actual individual needs for therapy.

Meantime, Legal News Online is reporting that since January 2009, the US Department of Justice has recovered over $14 billion in false claims cases, including $10.2 billion related to fraud committed against federal health care programs.