In the wake of the week in which the federal government arrested 90 healthcare professionals accused of fraudulent acts against Medicare, it would be useful to review the key pieces of legislation, the so-called Anti-Kickback Statute and the Stark Law, that often undergird the government’s actions in sweeps such as these. In addition to reviewing these laws, San Francisco qui tam lawsuit attorney Gregory J. Brod would like to revisit the federal False Claims Act, which is the legal basis of support for action by a whistleblower on behalf of the government in cases where fraud has occurred.
A kickback, of course, is basically negotiated bribery in which some form of a commission, usually money, is paid to the person who takes the bribe in return for services he or she performs for the person who offers the bribe. In such a quid pro quo arrangement, the person taking the bribe and the person offering it are in collusion.
Kickbacks are a pervasive factor in government corruption involving public officials, but they are also a troubling incentive for fraud to be committed against the government by private individuals and entities, for example, in schemes that are cooked up to steal money from Medicare. The problem of medical companies paying doctors to refer patients to them for treatment, tests or other healthcare, whether the patient needs the care or not, has been a growing phenomenon in the United States. In 1972, Congress passed major legislation to discourage this sort of behavior in the form of the Anti-Kickback Statute, 42 U.S.C. Secs. 1320a-7b(b), which forbids anyone from offering, paying, soliciting or accepting anything of value in order to encourage or reward referrals or generate federal healthcare program business.
In 2011, Congress went an important step further in its quest to combat Medicare fraud when it passed the Stark Law. The Stark Law, 42 U.S.C. Sec. 1395nn, was named after its sponsor, former U.S. Rep. Pete Stark of California, and it is a limitation on certain types of physician referrals. Specifically, the Stark Law forbids a doctor from referring Medicare patients for designated healthcare to an entity in which that doctor or an immediate family member has a financial stake; the law also prohibits such designated healthcare entities from submitting claims to Medicare for services that have occurred as result of the prohibited referral.
While the Anti-Kickback Statute and the Stark Law are relatively new pieces of legislation, the main weapon in the federal government’s arsenal for combatting fraud, the False Claims Act, is much older, having been on the books since 1863. The False Claims Act, 31 U.S.C. Secs. 3729-3733, also known as the Lincoln Law, assigns liability to individuals and companies that knowingly defraud government programs.
The important “qui tam” provision of the False Claims Act permits individuals who are not affiliated with the government but have knowledge of fraud committed against programs such as Medicare to file a lawsuit on behalf of the government, with the person initiating the action known as a whistleblower. Such qui tam lawsuits account for a large majority of all legal action under the False Claims Act, and the whistleblowers who initiate them stand to receive 15 percent to 25 percent of any recovered damages.
Fraud against Medicare and other government programs represents a drain on the U.S. Treasury, fleecing of the taxpayers, and a significant factor in the rise in Medicare premiums. It is important for any would-be whistleblower to secure experienced legal representation in order to pursue a qui tam lawsuit. If you have knowledge of a fraudulent scheme against Medicare or another government program, we urge you to contact the legal team at the Brod Law Firm for a free consultation.
-James Ambroff-Tahan contributed to this article.
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The Many Guises of Medicare Fraud: Part III