From its earliest beginnings, the False Claims Act (FCA) has been a valuable resource in uncovering fraud against the federal government. In fiscal year 2010, the FBI estimated that health care fraud cost American tax payers over $80 billion a year. Of that amount, $2.5 billion was recovered through the False Claims Act – qui tam provisions. Because of this, the OIG, Texas AG and Texas Department of Insurance are conducting an increasing number of investigations into possible violations of the Federal False Claims Act by healthcare professionals and facilities. In this blog, we address what a qui tam lawsuit is, the meaning of a whistleblower and the ramifications that follow in a healthcare fraud investigation under a qui tam.
How does a qui tam case work?
Qui tam is an abbreviation of a Latin phrase meaning “who as well for the king as for himself sues in this matter.” Have you ever heard of the term whistleblower? A qui tam is, in effect, a whistleblower action. A whistleblower action is when an employee reports his or her employer because they feel their employer is conducting fraud and falsely billing government programs – aka blowing the whistle on the operation.
It’s important to note that the False Claims Act is one of the few remaining statutes permitting private individuals, or qui tam whistleblowers, to bring suit on behalf of the government and share a percentage of the recovery. If the plaintiff or government prevails in the action, the whistleblower then receives a portion of the recovery. Similar to the Salem witch trials where people falsely accused others of witchcraft, whistle blowers in the medical industry have been known to do the same. Because of the nature of a qui tam case, disgruntled employees can sometimes take advantage of this process to bring unwarranted pressure on their employers via an investigation. Your business, license and reputation is after-all on the line if or when the Office of Inspector General (OIG), State Attorney General (AG), Medical Board or other regulatory agency comes knocking on your door demanding to interview employees and take office records. If you or organization finds yourself in this situation, it’s important to immediately contact and obtain advice from an attorney familiar with the legal types of investigations. Individuals and organizations that are accused of committing healthcare fraud, either directly or indirectly, can be liable for civil and/or criminal penalties.
Civil Penalties Under the False Claims Act and the Statutes of limitations.
Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded and civil penalties of $5,000 to $10,000 for each false claim. The statute of limitations for a qui tam action is found in Title 31, Section 3731(b) of the United States Code.
“A civil action under section 3730 may not be brought— (1) more than 6 years after the date on which the violation of section 3729 is committed, or (2) more than 3 years after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.”
Courts assess the time at which either the whistleblower or the government became aware of the violation or knew of the violation in determining which limitation period applies to the FCA action.
False Claims Act – Qui Tam Case examples:
- Inflating costs relating to patient care
- Duplicate billing
- Upcoding: the practice of using a billing code that results in a higher reimbursement rate than the level of service justifies.
- Unbundling codes: The practice of using two or more Current Procedural Terminology (CPT) billing codes instead of one inclusive code - in this scenario, tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. When a provider breaks these services out of the group and bills them individually, the provider is deemed to be “unbundling”
- Double-billing Medicare or Medicaid and a private company for the same treatment. Double billing also occurs when a provider attempts to charge for the same service by billing using an individual code and again as part of a bundled set of tests.
- Billing for services not furnished, supplies not provided, or both, including falsifying records to show delivery of such items
- Kickbacks such as disguised payments made in return for patient referrals or non-cash payment to physicians in return for patient referrals (for example free or below market value rent)
- Stark Law Violations: If a physician (or immediate family member) has a direct or indirect financial relationship (ownership or compensation) with an entity that provides any of certain designated health services (“DHS”), the physician cannot refer patients to the entity for DHS and the entity cannot submit a claim to Medicare for such DHS unless the financial arrangement fits in a statutory or regulatory exception.
Guidance in an Investigation. Defense Against Enforcement.
The federal government brings qui tam proceedings against healthcare organizations on a regular basis. Surprisingly, a majority of qui tam lawsuits under the False Claims Act are legitimate misunderstandings or billing errors which result in allegations of healthcare fraud. All false claim investigations should not be taken lightly - even if you are told you “are not the target of the investigation”. Anything you say to an investigator can be used against you. If you have been contacted by the DOJ, OIG, AG, or TDI, do not delay in protecting your business. Contact our law firm, Hendershot Cannon Martin & Hisey P.C. We are well versed and experienced in handling civil investigative demands, subpoenas, interviews, document production, hearings and trial.