February 10, 2014 — Whistleblowers can have a huge impact in the struggle against Medicare and Medicaid fraud. The U.S. Justice Department (DOJ) relies on health care insiders to identify false claims before federal investigators could possibly discover the wrongdoing. In addition, the federal False Claims Act includes qui tam provisions that empower informants to file a claim in court for the government’s benefit. To encourage tipsters to file suit, the Act entitles them to a substantial cut of the government’s recovery.
Whistleblowers Allege Hospital Chain Instituted Improper Program to Boost Inpatient Admissions by Paying Kickbacks
The government has intervened in eight whistleblower lawsuits alleging False Claims Act violations involving Health Management Associates Inc. (HMA). Filed in Florida, Georgia, Illinois, North Carolina, Pennsylvania and South Carolina, the suits allege that HMA submitted false claims to federal healthcare programs, seeking reimbursement for HMA hospital admissions from the emergency departments when inpatient admission was medically unnecessary.
The False Claims Act lawsuits allege that HMA paid kickbacks to emergency room doctors in exchange for their patient referrals. One of the whistleblowers alleged that HMA’s former CEO, Gary Newsome, oversaw an intentional corporate practice of strong-arming emergency department doctors and hospital administrators alike to boost HMA’s inpatient admission rates, without regard to medical necessity.
According to the DOJ, HMA’s corporate officers pressured emergency department doctors to admit patients even though it was unnecessary — the patients could have been observed for a time, or treated as outpatients or simply discharged. Some patients were allegedly admitted improperly for inpatient surgeries that should have been scheduled as outpatient procedures. These practices resulted in the submission of false and inflated claims to federal healthcare programs.
To encourage physician groups staffing HMA emergency rooms to participate in the scheme, HMA allegedly paid the doctors kickbacks in the form of contract awards or bonuses. Other physician groups also were allegedly paid kickbacks in exchange for patient referrals. Sometimes the kickbacks were paid through free staffing, or rent, or discounted equipment and other times by direct payments.
The Anti-Kickback Statute makes it a crime to pay kickbacks in exchange for referrals of services, such as hospital stays, that are covered by federally funded healthcare programs like Medicare or Medicaid. The Stark Statute makes it a crime for a hospital to submit claims for treatment or hospitalization of patients referred by a doctor with whom the hospital has a prohibited financial arrangement. The purpose of the statutes is to make certain that doctors make decisions based on the patient’s best interests and not on their own improper financial arrangements.
Fighting Kickbacks that Endanger Patient Safety and Increase the Cost of Medicare
Health care insiders at most hospitals just want to do the right thing — help patients recover their good health. These honest employees deserve to understand their own rights under the False Claims Act prior to bringing a whistleblower lawsuit. With qui tam lawyers in California, Texas and the Washington, D.C. area, Waters & Kraus is focused on protecting your interests. When the time is right to collaborate with the government, contact us or call our qui tam lawyers at 855.784.0268 to learn more about your interests in the whistleblower process.