Research Hospitals Becoming New Target for False Claims Act Actions

800px-Hospital_room_ubtThe False Claims Act is a federal statute designed to be used by whistleblowers who expose government fraud and waste. The whistleblower seeking to expose this type of deceit and corruption files a private lawsuit seeking to assert the rights to compensation for the government. Regardless of whether the government joins the suit and assists in the prosecution of the case, the successful whistleblower is permitted to recover a portion of the amount of funds he or she is able to recover for the government.

Those entities most likely to find themselves the target of a False Claims Act suit are private doctors’ offices and other healthcare providers who accept patients with Medicare and Medicaid. In recent years, however, there has been an increasing number of FCA suits filed against a new defendant – the university hospital.

Examples of FCA Claims Against Research and University Hospitals

The university hospital is a hospital where newly-educated doctors complete their residencies. The hospital itself is affiliated with a local medical school – such as the University of California San Francisco Medical Center. These doctors provide care and treatment under the supervision of an attending physician. Because these are working hospitals, many accept patients with Medicare and Medicaid. When these hospitals submit false claims to the government for repayment, a False Claims Act suit may be filed by a whistleblower with knowledge of the wrongdoing. Some examples include:

  • Billing at improper rates: Work performed by a resident is billed at a different rate than work performed by an attending physician. Some hospitals have found themselves in trouble for submitting claims in which work is alleged to have been completed by an attending physician when in fact the work was performed by a resident. These hospitals would (allegedly) pocket the difference between the cost of the resident’s work and the amount received from Medicare or Medicaid.
  • Billing for unnecessary services: Some hospitals have been named as defendants in FCA suits for submitting claims to Medicare and Medicaid for procedures and treatments that were unnecessary or for high-cost procedures and treatments in situations where a less-expensive treatment would have accomplished the same goal. In other cases, claims for reimbursement have been submitted but the patient’s medical record and supporting documentation was so sparse it was impossible to determine if the procedure was actually needed.
  • Billing for services already paid by another payor: Finally, in some instances a hospital received payment for a clinical procedure from the sponsor of the procedure only to turn around and bill Medicare and Medicaid for the same procedure. This resulted in the hospital being paid twice for the same work.

These examples illustrate two truths: There will be no end to people and entities that will attempt to “game the system” for their own personal game, but whistleblowers’ qui tam suits under the False Claims Act are effective at exposing illicit and unethical behavior and protecting the taxpayer’s dollar.

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