Essay: More ammunition for a case: Look for fraud, whistleblower potential

by • May 1, 2007 • UncategorizedComments Off on Essay: More ammunition for a case: Look for fraud, whistleblower potential1661

© The Medical-Legal News 2007

By Rose Clifford, editor

The U.S. Department of Justice recovered a total of $3.1 billion for fiscal year 2006 in fraud cases. About 72 percent of the recovered money came from healthcare. At a 15 to 30 percent rate of award for qui tam whistleblowers, this is a lot of money — and there is no shortage of fraud [see related story, Page 24].

Healthcare fraud accounts for a large portion of the money recoveries made by the federal government. For example, in fiscal year 2003 alone, HCA, formerly known as Columbia/ HCA paid the federal government $641 million for cost reporting fraud, physician kickbacks and overbilling. Abbott Laboratories paid $382 million for offering kickbacks to undercover agents for purchasing Abbott products and then advising the agents on how to bill their products so as to receive payments. AstraZeneca Pharmaceuticals paid $280 million dollars for conspiring with healthcare providers to charge for free samples of their prostate drug, Zoladex. Both Bayer Corporation and SmithKline Beecham Corporation paid $143 million and $47 million respectively for relabeling products previously sold at discounted rates, and then concealing the discount. And Tenet Healthcare paid a $51 million settlement for performing unnecessary cardiac procedures.

How qui tam works

The 1986 amendments greatly strengthened the qui tam provisions of the False Claims Act. The qui tam provisions allow and empower individuals known as “relators” to file a lawsuit on behalf of the U.S. against entities that have made false or fraudulent claims and that received federal monies for making such false claims, such as claims paid by Medicare, Medicaid and TriCare. Of the recoveries for fiscal year 2003, over half, $1.48 billion, were associated with whistle-blower lawsuits filed under the qui tam provisions. If after submitting a sealed complaint, the U.S. decides to intervene in the action and prevails, the relator can recover 15 to 25 percent of any settlement that is awarded as a direct result of the fraud initially reported. If the U.S. government declines to intervene, the percentage increases to 30 percent if the whistle-blower pursues the action privately.

How fraud works closer to home

Discovering medical billing fraud in a medical negligence case can provide leverage for negotiations for early settlement. If present, billing fraud can negatively implicate the care delivered, even if the care delivered was within the minimum standard required. Discovery can expose the guilty party to both civil and criminal investigations. Larger ramifications for the healthcare provider could be state or federal investigations of the entire practice, and exclusions from Medicare. Identification of medical billing fraud would be helpful to the defense in terms of considering early settlement.

How to discover fraud

Discovering medical billing fraud in a negligence case is not difficult, it simply requires an awareness of the most common fraud schemes and diligence in reviewing the medical bills in conjunction with the medical records.

The med mal insurer should take notice

If the med mal insurer understands the significance of fraud and recognizes the implications for the insured, it may be more open to settling a case, especially if there is a possibility that their insured could recognize that the insurer exposed them to subsequent fraud investigations as a result of refusing to make a reasonable settlement. Frequently, billing fraud is not an isolated incident.

In personal injury cases, evidence of fraud may prompt the defense to seek or refer their findings to the state department of insurance or to the Attorney General’s office. This may spawn an investigation by a special investigative fraud unit. •

Rose Clifford is a legal nurse consultant based in Cynthiana, Ky.,

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