Medicare Compliance & Reimbursement

The latest whistleblower case raises more questions about whether healthcare providers are vulnerable to quitam lawsuits brought by a billing consultant -- and how they can head off that prospect at the get-go.

The nitty gritty: A hospital consultant, Tony Kite, filed qui tam lawsuits that triggered the Department of Justice to bring fraud charges against two separate hospitals. The False Claims Act lawsuits alleged that the hospitals had jacked up their Medicare costs in order to inappropriately capture outlier payments. The DOJ announced a settlement in one case last November, and the other one in late February 2010 (www.justice.gov/opa/pr/2010/February/10-civ-197.html).

Kite reportedly netted more than a million dollars plus interest (minus his attorney fees).

The kicker: Mr. Kite had been involved in previous whistleblower cases and appears to be what some refer to as a "professional whistleblower," says Richard Blake, an attorney with Bricker & Eckler in Cleveland, Ohio, who wrote about the matter in the law firm's newsletter. While Kite doesn't appear to be an attorney, "he does appear to have a relationship with one of the more successful qui tam law firms in Washington D.C.," Blake tells Medicare Compliance & Reimbursement.

The case has spurred concern among providers about whether the ability to get rich quick could spur outside  consultants to follow Kite's lead and report alleged overbilling to the government. There may be some reassuring news, however.

"An attorney could not make such a report, due to attorney"client privilege," says attorney William  Markette Jr., in private practice in Indianapolis, Ind.

"Professionally, certified public accounts have a similar confidentiality obligation under" their code of ethics. On the other hand, Markette warns: "A provider should realize that when it brings in an outside consultant who does not have a confidentiality obligation" -- that person could very well turn you in if he or she finds a problem.

Must-do: In all case, healthcare providers should vet their consultants. "Google their names and ask for references," Blake advises.

Double-edged sword: "Some people contend that we need people like Mr. Kite to ensure that healthcare providers follow the rules and that those who do so have nothing to fear," observes Blake, a former assistant U.S. attorney. Others maintain, however, that any whistleblower action places an "enormous strain" on healthcare providers, he points out. "The threat of potential treble damages and penalties, plus legal costs and the time commitment to litigation, can easily intimidate providers into settling with the government for lesser amounts" -- even when the providers don't believe they have done anything wrong.