As we have noted previously, The federal False Claims Act triggers civil and criminal penalties for healthcare providers and others who make fraudulent claims under any sort of government contracts, as well as under programs like Medicare and Medicaid and Veterans Administration benefits programs. The vast majority of False Claims Act settlements come out of healthcare-related fraud, although claims are also made under many other areas, such as federally-insured loan and mortgage programs, federal research grants, disaster assistance and farm support. In short, any situation in which taxpayer money is being disbursed under false pretenses can trigger a False Claims Act lawsuit for recovery.
False Claims Act Case Brings Convictions
Last week, in what has been described by authorities as a $12 million Medicare fraud scheme, a Texas doctor and two nurses were found guilty of Medicare fraud, based on charges they defrauded the federal program through an elaborate scheme over the course of an eight-year period, in which the defendants billed Medicare for home health services that were either never provided or were deemed unnecessary.
Defendants Dr. Kelly Robinett, 70, and Kingsley Nwanguma, 47, were convicted by a federal jury in Dallas on three counts of health care fraud, and one count of conspiracy, while Joy Ogwuegbu, 42, was convicted of four counts of health care fraud.
According to prosecutors, the scheme ran from 2007 through 2015, during which time the three defendants and others made fraudulent claims against Medicare through a home health agency and a physician house call company, where evidence showed they ordered medically unnecessary home health services, many of which were never provided.
In many cases, a patient would be referred by a doctor for specific care, usually at home. Then, a visiting nurse or a home care provider would log the hours as services being provided, despite the fact that many such services might not have been necessary, based on the regulations set forth by the Center for Medicare and Medicaid Service (CMS). In many cases, the services were never actually provided.
False Claims Act Settlement Brings $1.4 Million Reward for Whistleblower
Given that the Department of Justice (DOJ) is cracking down on this type of fraud, it should be no surprise that another case was settled late last month, when the DOJ announced a False Claims Act settlement with home hospice care chain Caris Healthcare, LLC. That company agreed to pay $8.5 million to settle allegations that they knowingly submitting false claims and retained overpayments for hospice patients who were ineligible for Medicare hospice benefits because they were not terminally ill. Caris Healthcare is a for-profit hospice chain that operates in Missouri, Tennessee, Virginia, Georgia and South Carolina.
The government’s complaint alleged that Caris admitted patients whose medical records did not support a terminal prognosis. The claim also alleged that, even after Caris was alerted to the patients’ lack of eligibility, the company continued to submit claims and took no significant action to determine if it had received improper payments.
In the Caris Healthcare case, a former registered nurse with Caris Healthcare, Barbara Hinkle, filed allegations against the company as a whistleblower, which means, according to the False Claims Act, she will receive the whistleblower’s share, which in this case will be $1,402,500.
The Benefit to Whistleblowers
You see, if a whistleblower lawsuit is successful and the government recovers  taxpayers’ money, the whistleblower is entitled to a reward; a portion of the recovered funds, based on the size of the recovery. Over the past several decades, the federal government has paid out tens of billions of dollars in rewards to whistleblowers in these cases. That should serve as quite the incentive for those who see fraud against the government occurring, to become a whistleblower and turn them in.
In addition to the federal False Claims Act, the state of Texas has its own version. For the most part, the Texas law is identical to the federal law, although actions brought under the Texas False Claims Act can carry both civil and criminal penalties. A few other key differences include a provision whereby a party may be found liable if they present a claim under Medicaid (which is actually a state program administered by Texas authorities) for services that have been provided by an unlicensed provider. In addition, there are also larger civil penalties for fraudulent acts that result in injury to any patient who is a child, elderly or disabled.
Taxpayers should always be protected, and citizens who are aware of practices that may be against laws or regulations should know that it is worthwhile to protect everyone from fraud. If you know of any fraud in the Medicare and Medicaid systems, or on any government contract, it can certainly be worthwhile to report it.