Federal Judge Helps Clarify Requirements for Successful Medicare Fraud Claims

At the Brod Law Firm, we are honored to work with brave individuals who come forward to report Medicare fraud. These admirable people help the government recover money that has been stolen from its coffers, ensuring the funds are available to the many honest Americans who rely on the program for their health care needs. In this post, we look at a ruling by a federal judge seated in California that discusses what needs to be alleged to bring a successful Medicare fraud claim. Attorney Brod, our office’s California health care fraud lawyer, believes in communicating closely with his clients and helping them to understand the law and the legal process. While it is not a substitute for meeting with our team (the first consultation is free), we hope this post helps readers begin to understand the complex law of Medicare fraud and the False Claims Act.

Former Employee Alleges Manipulation of Medicare Risk Scores to Increase Payments
A website aimed at executives in the health care industry (an unusual source for our blog, but one that provided useful coverage) reported on a ruling this summer in a whistleblower case alleging Medicare Advantage fraud. Medicare and Medicaid use a risk-scoring system, developed in the mid-to-late 200s, to adjust monthly payments. In 2009, Swoben, a former data manager for the SCAN health plan which serves California and Arizona, accused SCAN and other insurers of manipulating these scores. He claimed HealthCare Partners, a managed care group serving 570,000 patients in California, engaged in a scheme to artificially raise patient risk scores. According to Swoden, the insurer defendants knew that the group did not properly review codes and that an independent review actually concealed the fraud.

Judge Outlines Requirements for Medicare Fraud Claims
In the summer of 2012, California, federal prosecutors, and Swoben settled with SCAN Health Plan for $3 million. The settlement was part of a large, complex overpayment settlement that involved SCAN paying $323 million to resolve claims dating back to 1985. This summer, federal Judge John Walter of the Central District of California dismissed the allegations against the remaining insurers. Judge Walter noted that allegations such as these that fall under the False Claims Act require proof of false statements, fraudulent acts, and fraudulent intent. He said none of these elements were proven in this case. Further, Judge Walter held that while Swoben was not required to supply examples of a false claim for each of his allegations, a plaintiff “must at least allege ‘particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted'” (citing prior ruling by the Fifth Circuit Court of Appeals). Since Swoben failed to go beyond speculation to more specificity, Judge Walter granted the defendant insurers’ request and dismissed the case.

Bringing a Successful Medicare Fraud Claim
Often, the greatest insights into the requirements for a successful case actually come from judicial opinions dismissing similar claims. In this vein, Judge Walter’s ruling clarifies the requirements for pleading a claim of Medicare fraud and this clarification will be helpful to anyone building a future Medicare fraud claim. Additional information on reporting and preventing fraud can be found on the official Medicare website.

No website or blog entry can be a true substitute for a direct conversation with a lawyer who understands the law of Medicare fraud. If you believe you have spotted a case of Medicare fraud, Attorney Brod can help. Please remember that the law protects whistleblowers from retaliation, a point particularly relevant to those who report fraud perpetrated by their employers. Furthermore, in addition to the knowledge that you helped fight those who defrauded our nation and stole from a system designed to protect the health of the elderly and disabled, you may be entitled to a significant monetary reward. Call to arrange a free consultation to discuss the law and your suspicions.

See Related Blog Posts:
Addressing Medicare Fraud

Health Care Fraud & Whistleblower Suits: A $150 Million Example