A Basic 4-Point Guide for Medicare Whistleblowers

Oberheiden P.C.

Oberheiden P.C.

According to the National Health Care Anti-Fraud Association, an estimated $100 billion is lost to Medicare fraud every single year in the U.S., with overtaxed law enforcement agencies relying heavily on whistleblowers to bring Medicare and Medicaid fraud, waste, and abuse to their attention. Unfortunately, many people with access to information that indicates Medicare fraud hesitate to come forward. However, they stand to recover a portion of what gets recovered in the resulting fraud case, and also benefit from workplace protections from retaliation.

Here are the four more important things that you need to know if you think that you have uncovered evidence of Medicare fraud and are thinking about becoming a whistleblower.

1. What Reportable Medicare Fraud Looks Like

Medicare is the federal health insurance program for people in the U.S. aged 65 or older. The fact that the people covered by government healthcare programs are senior citizens, coupled with the fact that it is an $800 billion federal program, makes it a prime target for fraudsters. There are dozens of ways to do a fraudulent reimbursement claim and unlawfully line your pockets, in addition to the unknown number of ways that law enforcement officials do not know yet.

Just a few of the most common fraudulent schemes include:

  • Reselling prescription drugs that were bought with Medicare money
  • Providing medical care that was not necessary and then billing Medicare for it
  • Paying patients to receive medical treatment
  • Providing or receiving kickbacks for a patient referral
  • A host of fraudulent billing schemes, such as:
  • Unbundling, where the healthcare provider separates services that are normally billed together at a discount and instead bills them individually at a higher price
  • Upcoding, where providers bill Medicare for a service that is similar to, but more expensive than, the service that was actually provided
  • Phantom billing, where goods or services that were never provided are billed for, or where medical care is “provided” to patients that do not exist
  • Double billing, or submitting multiple bills for compensation for the same good or service

Some of these courses of conduct are quite brazen. For example, one nurse practitioner was convicted and sentenced to 20 years in prison for defrauding the program of $192 million in a phantom billing scheme in which she fraudulently billed the program for, among other things, telemedicine visits that often totaled more than 24 hours in a single day.

Most, however, are more discreet and more difficult to detect. This is why the federal government relies so heavily on whistleblowers to uncover evidence of committing Medicare fraud, and that is why, under the qui tam provisions, the federal legislation protects whistleblowers from retaliation and provides such a lucrative financial incentive to blow the whistle on suspected fraud within the healthcare system.

2. Most Medicare Fraud Cases Use the False Claims Act

The federal legislation that most whistleblowers use to report Medicare fraud is the False Claims Act (31 U.S.C. §§ 3729 et seq.), which covers fraudulent claims for compensation that are made against government programs, like Medicare. This is good news for potential whistleblowers because the federal False Claims Act has some of the strongest protections from workplace retaliation, as well as some of the most generous whistleblower awards. However, if your healthcare fraud, waste, or abuse claim is based on physicians taking kickbacks for patient referrals, it may utilize the:

3. Retaliating Against a Whistleblower is Prohibited

The anti-retaliation provision of the False Claims Act, 31 U.S.C. § 3730(h), is often regarded as more protective of whistleblowers than other statutes that provide an avenue for private citizens to report evidence of committing Medicare fraud or misconduct to law enforcement and file a qui tam lawsuit.

First off, the False Claims Act prohibits a wide range of retaliatory conduct, not just termination. It also forbids:

  • Harassment
  • Demotion
  • Suspension
  • Threatening to retaliate
  • Any other form of employment discrimination

However, many employers that stand to lose business or a lucrative scheme of Medicare fraud may still retaliate against the whistleblower who reported the false claim. If you can show that the retaliation was connected to your lawful whistleblowing activities, though, you can file a wrongful termination or workplace retaliation claim and recover:

  • The back pay that you lost due to the retaliation
  • A civil penalty equal to twice the amount of your back pay
  • Interest on your lost wages
  • Compensation for other losses associated with the retaliation, like your emotional distress
  • Attorneys’ fees and other legal costs for filing the wrongful discharge lawsuit

Additionally, you are entitled to reinstatement to your old role, and at the same level of seniority that you had when you were discharged. If you do not want to be reinstated to your old job then you could recover front pay, instead.

4. Whistleblower Awards Can Be Lucrative

To incentivize whistleblowers and encourage them to report fraud with evidence, federal law enforcement agencies provide financial awards to whistleblowers who bring them evidence of fraud that can be acted upon.

How much Medicare whistleblower rewards paid will depend on several factors.

The most important factor is whether the government intervenes in your case or if you prosecute it on the government’s behalf. If your case fits into False Claims Act cases, you can receive 15 to 25 percent of the case’s civil penalties if the government takes your case over. However, you can receive as much as 30 percent if they decline to intervene.

While this might sound as if it would be better for you if the government does not get involved, the odds of success increase dramatically if they do, as they have the resources necessary to conduct a thorough investigation of your claims.

“Even a whistleblower award that is closer to 15 percent of the proceeds of the case can be substantial, particularly if the case is filed under the False Claims Act. The case’s proceeds would include the amount defrauded from Medicare, plus a civil fine of over $13,000 per violation – which can stack up, as there is one violation for every fraudulent bill sent to Medicare. This amount is then multiplied by three, as the False Claims Act imposes treble damages. Cases that settle for less than the true amount owed can still lead to massive awards for the whistleblower that brought the Medicare fraud to the government’s attention.” – Dr. Nick Oberheiden, founding partner of the Medicare whistleblower law firm Oberheiden P.C.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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