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National representation of Nursing Home/Healthcare Whistleblowers

Nursing Home/Healthcare Whistleblowers


Since the revitalization of the False Claims Act ("FCA") by the 1986 Amendments, the Government has aggressively pursued civil, criminal, and administrative actions against those who swindle money from the Federal treasury. Since there is no shortage of corrupt contractors, the Government and relators have been busy. The Department of Justice reported, in fiscal year 2003, that FCA recoveries were the highest in years, totaling $2.1 billion.

Although the majority of these recoveries were in the area of healthcare fraud, significant recoveries were also made in other areas. Most often, qui tam cases involve healthcare and defense contractors, but some also relate to financial services, environmental regulation, oil, gas and mining, and scientific research.

  • Medicaid/Medicare Healthcare Fraud
  • Defense Contractor Fraud
  • Environmental Regulation
  • Oil, Gas and Mining
  • Scientific Research
  • TARP Financial Fraud
  • IRS Tax Fraud Cases

Fraud and abuse accounts for almost ten per cent of total Government Medicaid and Medicare spending on healthcare, or approximately $120 billion per year. The potential harm caused by fraud in the Medicaid/Medicare healthcare industry cannot be overstated: total spending on healthcare for 2002 alone reached $1.5 trillion. Below are the types of qui tam cases often pursued in the area of Medicaid/Medicare healthcare fraud.

  • Medicaid/Medicare Fraudulent Billing
    Treatment Issues
    Misrepresentation of Credentials
    Upcoding or Improper Coding of Goods and Services
    Bundling and Unbundling Procedures
    Misrepresentation of Patient Data – Populations
  • Anti-Kick Back
  • Self-Referral
  • Best Price
  • Best Value
  • Off-Label Marketing

FCA qui tam claims involving Medicaid/Medicare healthcare vary, depending on the level of care needed and provided. Categories often involve allegations of total neglect or no services, worthless services, inadequate and inferior services and products, and aggressive patient treatment. Other areas of fraud involve misrepresentation of credentials, upcoding of services, unbundling of services, and misrepresentation of patient data or populations. A more in-depth discussion of the types of fraudulent billing healthcare qui tam cases follows.

1. Treatment Issues. There are five potential areas in which qui tam cases arise in the area of treatments for which Medicare or Medicaid claims are submitted.

A. Total Neglect or No Services Provided.

The most obvious case of FCA liability imposed on a physician for fraudulent billing occurs when he submits claims for services that were not provided. For example, a physician submitted reimbursement claims to Medicare for surgeries he never performed. The Government sued to recover for payment of 31 false claims, and the Court found him liable.

B. Worthless Services.

A healthcare provider may also be liable for submitting claims for services rendered if the services are so deficient that there was no medical value. For example, if, in providing a multitude of services, a nursing home failed to properly feed a patient resulting in an overall deterioration of health, serious illness, or death, a Court could find the value of all services to be worthless.

C. Inadequate Services. Many reported schemes involving inadequate care are accomplished by denying tests or services at facilities that are paid on a per diem basis. Although the services may not be considered worthless, they may be severely deficient, entitling the Government to some reimbursement for its expenditures. For example, Medicare may pay a nursing home facility per diem for each patient regardless of the services provided. By ordering fewer tests, using fewer supplies, employing less staff and reducing referrals to specialists, the nursing home facility is providing inadequate services to increase its profits. These tactics violate the Nursing Home Reform Act, the Social Security Act, and Medicare/Medicaid laws. When a nursing home is paid on a per diem basis for each Medicare patient, the nursing home implicitly agrees to follow the standards of care in the Medicare and Medicaid statutes and to provide adequate care in a manner that maintains or enhances the quality of life of its residents. If the nursing home provides inadequate care and submits a reimbursement claim for its residents, the nursing home is submitting a false claim in violation of the FCA.

D. Standard of Care.

Statutes and regulations governing Medicare, Medicaid, Social Security programs, as well as nursing homes, require healthcare providers to meet quality of care standards. A provider's failure to meet these standards may result in exclusion from the program, as well as substantial monetary damages. A provider may fall short of these standards when patients are subjected to unreasonable risks due to a provider's failure to take proper preventative measures. For example, a long-term psychiatric facility's failure to prevent patients from being subjected to a risk of physical and mental harm may expose the facility to FCA liability because it failed to meet the adequate standard of care.

E. Aggressive Treatment.

Aggressive patient treatment usually results when a physician orders unnecessary medical tests and provides unnecessary medical services. A provider can dramatically increase its profits for multiple procedures if it is reimbursed for each unnecessary test or service rendered, rather than being paid per diem.

2. Misrepresentation of Credentials.

Another area of fraudulent billing in the healthcare area occurs when a healthcare provider submits a false claim under the FCA for misrepresenting the credentials of the person who provided the services. These cases typically involve a provider representing to the Government that someone eligible for reimbursement provided the service, when it was actually performed by a person precluded from reimbursement. Cases involving misrepresentation of credentials may involve a wide variety of factual scenarios, including providing reimbursement claims with incorrect provider identification numbers ("PIN"), billing for services rendered by an unlicensed physician, or falsely representing that a teaching physician was present for procedures provided by a university's medical school in accordance with applicable Medicare regulations.

3. Upcoding or Improper Coding of Goods and Services.

When submitting a claim for Medicare reimbursement to the Government, the claimant must provide documentation that supports the claim. Appropriate documentation typically involves correctly coding certain services to enable the Government to reimburse the healthcare provider at the proper rate. Coding accuracy is a major concern for all physician offices, clinics, and hospitals because incorrect coding can have severe financial, and even criminal, consequences. Healthcare providers, such as hospitals and physician groups, will often contract with outside vendors to perform coding and billing services. The physicians send a copy of their charts to the vendors, which, in turn, code the services or procedures performed and submit a claim for reimbursement to Medicare. If the vendor submits reimbursement claims for a higher billing code than what is justified by the physician's charts, then the vendor may be liable for submitting false claims.

4. Bundling and Unbundling Procedures.

The term "bundling" refers to coding related medical services as one inclusive procedure, in contrast to submitting claims for separate services. For example, a laboratory testing facility may bundle the codes and, therefore, the cost of a procedure that analyzes several components at once. The Center for Medicare and Medicaid Services provides some guidelines to providers for which services and goods should be bundled in a document called the Hospital Manual. The Hospital Manual requires healthcare providers to combine these types of services into a single claim for reimbursement. Therefore, bundling services is simply the method healthcare providers should use to bill Medicare. It is not an FCA violation. However, many providers will initially bundle services to receive reimbursement for the one inclusive procedure, but then submit another claim in which the same procedure has been unbundled into separate procedures to receive a second reimbursement on the same services. This is termed "unbundling" and can "double" the reimbursement collected from Medicare for services or procedures performed. This may lead to liability under the FCA.

5. Misrepresentation of Patient Data – Populations.

Many physicians provide services for patients either in a nursing home, where the patient resides, or in the physician's office. Due to complex interactions between nursing homes and physicians, billing inaccuracies frequently occur that could translate into false claims. Rosen & Spears handles these cases on a contingency fee basis, meaning that the firm earns a fee only if it is successful for the whistleblower. The firm also represents individuals in white collar civil and criminal cases. Many whistleblowers with inside information may have civil and potentially criminal exposure, and decisions will need to be made about the risks of pursuing a qui tam case.

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This website is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this website also does not result in the formation of a lawyer-client relationship.

You should be aware that qui tam claims are subject to a statute of limitations. The area of limitations periods is complex. There are also first-to-file rules, public disclosure bars, original source issues, and varying limitations in pursuing retaliation claims. If you wish to pursue your claims, you should promptly seek the opinion of an attorney regarding the merits of your qui tam claim and the applicable statute of limitations.