Medicare Compliance & Reimbursement

Plus: Qui tam law firms reach out to employees.

If compliance isn’t your strong suit, you may need to revamp your policies. As the stakes rise and fraud takedowns increase, Medicare providers may find themselves facing whistleblower-induced scrutiny.

Look at These 3 Qui Tam Suits

In Florida: Palm Beach-based Healthquest Inc. and its owners, Frank Jaramillo and Ruth Jaramillo, have agreed to pay $1.5 million to settle allegations that Healthquest paid kickbacks to marketers to induce patient referrals, the Department of Justice (DOJ) says in a release. They also entered into a five-year Integrity Agreement.

From December 2013 to May 2017, Healthquest paid kickbacks to its marketers to induce them to refer patients, alleged a whistleblower lawsuit filed by a former marketer. The qui tam relator will receive $300,000 in the case, the DOJ says.

In New York: Health Quest Systems Inc. and some subsidiaries will pay $14.7 million to resolve fraud charges. In addition to hospital and physician billing misdeeds, Health Quest allegedly submitted home health claims that lacked sufficient medical records to support the claim, including documentation of a face-to-face encounter with a physician, the DOJ states in a release.

Four whistleblowers in three suits will receive more than $2.7 million of the settlement. The relators, all former Health Quest employees, include a former Director of Operations and Corporate Compliance Officer.

In California: Three organizations — Prime Healthcare Services, Inc., Prime Healthcare Foundation, Inc., and Prime Healthcare Management, Inc., which are “collectively” called “Prime” — and Dr. Prem Reddy, the founder and CEO of Prime will fork over $65 million to reconcile their allegations, indicated a DOJ release on the case. Over a span of seven years, Prime upcoded claims and admitted patients for medically unnecessary inpatient care as opposed to outpatient care, according to the DOJ. The organization will also be privy to a Corporate Integrity Agreement for the next five years in addition to its substantial fines and liable for an “independent review” of its Medicare claims.

Due to the significant size of the agreement, the whistleblower is slated to receive $17,225,000 as her portion of the settlement. The qui tam relator worked as a Director of Performance Improvement at one of the hospitals Prime owned.

Take a Look at These Statistics

In 2017, there were 799 cases that fell under the mantle of the False Claims Act (FCA) of which 674 were qui tam cases, according to DOJ data. This was the “fourth-highest number in any single year,” notes national law firm Gibson Dunn & Crutcher LLP in online analysis. Moreover, “of the more than $3.7 billion that the government recovered, almost $426 million — the second-highest amount ever — came from suits where the federal government declined to intervene and that were driven by private qui tam ‘whistleblower’ plaintiffs,” the Gibson Dunn & Crutcher LLP analysis stresses.

See the DOJ’s Fraud Statistics Overview for FY 2017 at www.justice.gov/opa/press-release/file/1020126/download.

The data implies that qui tam lawsuits may be on the rise, and the DOJ is grateful for whistleblower assistance to take down those who abuse the federal healthcare programs.

Feds weigh in: “Because those who defraud the government often hide their misconduct from public view, whistleblowers are often essential to uncovering the truth,” said Acting Assistant Attorney General Chad A. Readler of the DOJ’s Civil Division in a press about last year’s activity. “The Department’s recoveries this past year continue to reflect the valuable role that private parties can play in the government’s effort to combat false claims concerning government contracts and programs.”

Advocacy Groups Assist Whistleblowers

News of rising whistleblower recoveries adds fuel to the fire for disgruntled employees who feel ignored by management, experts note.

So do ads and releases such as this recent one from the Corporate Whistleblower Center: “In our books there is nothing more disgusting than a hospice company billing Medicare or Medicaid for end of life services for individuals who are not dying. If you are a medical doctor, a registered nurse or a healthcare manager and you can prove a hospice company is signing up homeless people or drug addicts who are not dying please give us a call,” the firm says. “Recently a whistleblower received $1.4 million for exposing a company ... getting paid for providing end of life care for people not dying.”

Other advocacy groups offer outreach, advice, and connections to qui tam attorneys for whistleblowers ready to turnover healthcare fraud and abuse information to the government, too.

Caution: With the increased focus on FCA violations by the DOJ, HHS Office of Inspector General, state agencies and other enforcement groups, now is the time to straighten out your practice’s compliance strategies. Because, even though FCA fines are a civil penalty, the mandate also includes a statute for criminal offenses — which carry substantial fines and possible imprisonment for individuals and entities found guilty.