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

Uncovering health care fraudfrequently invovles whistleblowers. People are often curious about whistleblowers, likely because they relate more to those reporting fraud than those committing it. The following story is continuing proof that whistleblowers are often ordinary people who are motivated to take extraordinary steps. Whistleblowers play a vital role in identifying and bringing an end to health care fraud. As a California health care whistleblowers’ law firm, we are proud to work alongside these individuals who epitomize the term “everyday hero.”

63 Year Old Vet Brings Down Multi-Billion Dollar Company’s Medicaid Fraud Scheme
In late 2011, ABC News reported on a Medicaid fraud lawsuit that they called “a real-life David versus Goliath story.” United States Congressman Rep. Trey Gowdy (R-SC) referred to the underlying fraud as the type of behavior that made people lose trust in the government. The fraud, committed by a multi-billion dollar company, was brought down by an ailing 63 year old man.

health$.jpgRichard West, a Vietnam War veteran, is wheelchair-bound and, since March 2003 has relied on Medicaid to remain at home while receiving medical care including the use of a ventilator and supplemented oxygen. When he received notice in September 2004 that New Jersey officials were suspending his Medicaid benefits for exceeding his monthly cap, he knew it was incorrect. West kept meticulous records that helped him determine that Maxim Healthcare, a multi-billion dollar company, submitted bills to Medicaid for 735 hours of nursing services that he did not receive. These false bills added up to over $20,000.

As is the case with many whistleblowers, West was ignored. He was ignored by New Jersey officials, by Medicaid, and by a social worker. Finally, he spoke to an attorney who helped him file a whistleblower claim pursuant to the False Claims Act. Speaking before Congress seven years later, a top investigator with Health and Human Services (“HHS”), Gary Cantrell, credited West for catching Maxim. Eventually, Maxim agreed to pay over $150 million in order to resolve both civil and criminal charges in what was, at the time, the largest fraud case involving home healthcare. Some lawmakers called for an even larger fine, noting that Maxim had essentially stolen from America and the American people. Nine individuals also pled guilty to felony fraud charges.

Pursuant to the whistleblower provisions, West was awarded $14.8 million of the Maxim settlement funds. Congressman Gowdy notes that it was impossible to believe West’s experience was an isolated case, adding that the nature of Medicaid leaves it susceptible to fraud, waste, and abuse. He estimated one-fifth of Medicaid spending is due to fraud. Cantrell, the HHS investigator, added “When we invest in fraud prevention government spending more than pays for itself.”

False Claims Act Recoveries for FY 2012
The U.S. Department of Justice produces an annual report on False Claims Act cases. In the report published in December 2012, the Justice Department announced the largest annual recovery with $4.9 billion in settlements and verdicts for fiscal year 2012. This included 647 whistleblower suits resulting in recoveries totaling $3.3 billion. Principal Deputy Assistant Attorney General Stuart Delery expressed the department’s gratitude to the whistleblowers who bring fraud to the attention of government officials, thus protecting the integrity of key government programs and saving taxpayer money; “[w]e are extremely grateful for the sacrifices they make to do the right thing.”

Protecting Whistleblowers and Helping Fight Health Care Fraud
If you have witnessed fraud against the health care system, whether as an employee of a company engaged in improper activities, as a health care consumer, or simply as a U.S. taxpayer, coming forward can allow you to make a real difference. It is a moral and ethical decision and it can also have financial rewards. Contact our San Francisco whistleblowers law firm for help bringing your claim. We can also protect you from any retaliation by the company, particularly in the case of employee whistleblowers.

See Related Blog Posts:
Settlement Reached in California Medicare Fraud Case

Health Care Fraud Alert – Scammers Mimic Health Care Exchange Sites

(Photo by Ano lobb)