Maryland False Claims Act Effective for Fighting Medicaid Fraud

February 19, 2013 — From July through December of 2012, the State of Maryland recovered over $14 million from businesses that attempted to scam the state’s Medicaid program by submitting claims for reimbursement to which the companies were not entitled. The Washington Examiner reports that the vast majority of the money — $12 million — was recovered under the Maryland False Health Claims Act.

Enacted in 2010, Maryland’s statute allows the state to collect three times the amount wrongfully charged to Medicaid and to fine fraudsters $10,000 for every offense. The Maryland False Health Claims Act allows individuals who become aware of a fraudulent Medicaid scheme to file suit on the state’s behalf and then share in a portion of any funds the state recovers as a result. Frequently, the whistleblowers who notify the government about the fraud are insider employees in the health care industry.

Maryland Informants Collaborate With the State to Combat Fraud

In Maryland, around a million residents are eligible to receive state Medicaid benefits. Maryland spends $9 billion each year on its Medicaid program. Maryland state officials estimate that between three and five percent of that number — as much as $450 million — is wasted on fraudulent billings. The state is now investigating 219 cases. Each one can take several years to prosecute. Maryland was not one of the first states to enact a False Claims Act with whistleblower provisions, but the law is tougher than in many other states.

State officials say that most of the Medicaid fraud is committed by drug makers and health care providers. Pharmaceutical companies, for example, may market their drugs to doctors for uses that the Food and Drug Administration has not approved. Hospitals, clinics, nursing homes, ambulance companies, and other health care providers sometimes bill Medicaid for more expensive services than the ones actually provided. According to insider informants, medical providers sometimes bill for procedures they didn’t perform at all.

Employees Are First to See Medicaid Fraud

Health care providers that overbill Maryland’s Medicaid program drive up health care costs for state taxpayers. Employee insiders are the first to see fraud happening and notify the state. Sometimes health care workers are ordered to perform procedures they are not trained to do. Accounting personnel may be told to upcode procedures or participate in other unscrupulous Medicaid billing practices. Many informants feel like their job is on the line if they don’t take part in the scam.

Before coming forward, whistleblowers deserve to know their legal rights. The qui tam lawyers at Waters & Kraus provide government collaborators with the answers they need. To learn more about Maryland’s Medicaid fraud statute and how we can assist you, send our whistleblower lawyers an email or call our Maryland office at 800.226.9880.