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The False Claims Act: Pedicures passing as medicine among priceless stories to be found

The False Claims Act: Pedicures passing as medicine among priceless stories to be found

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Who might be tripping the False Claims Act wire?

Doctors, hospital chains and insurance companies might be your first answer. But consider nursing homes, hospices, and alternative medicine providers. There are also billing companies, staffing agencies, food service companies, transcription services and other firms that never actually see patients but can also benefit from fraudulent claims. The list is quite long.

For a sample, go to the U.S. Department of Justice's site and do a search for "False Claims Act." Antidote came up with more than 2,500 items last week. Some of these were duplicative, but here are just a few of the finds:

Johns Hopkins Bayview Medical Center in Maryland was forced to pay $2.75 million after being accused of submitting false Medicare and Medicaid claims. According to the DOJ's press release about the case, Bayview staff members in the coding department:

...reviewed charts relating to inpatient hospital stays to determine if there was any way for the hospital to increase reimbursement by increasing the severity of the secondary diagnoses recorded for certain patients. According to the lawsuit, the employees allegedly focused on lab test results which might indicate the presence of a complicating secondary diagnosis such as malnutrition or respiratory failure, and advised treating doctors to include such a diagnosis in the medical record, even if the condition was not actually diagnosed or treated during the hospital stay, in violation of billing rules.

Might some kwashiorkor cases show up in Maryland, too? Two Bayview coders who blew the whistle received $550,000 for their trouble.

Hospice Home Care in Arkansas was accused of fraudulently billing Medicare $1.4 million for just 34 patients. How did they rack up such a large bill? The government says the company figured out it could charge Medicare for inpatient care at $500 a day, even though the patients in question needed what is known as "routine care," which should be billed at $115 a day. That's a difference of $2,695 per patient every week, $140,525 per year. As you can see, even 10 patients billed at the higher rate for one year could lead to that massive overcharge.

CareSource Management Group in Ohio, a case management company, paid state and federal agencies $26 million to settle a case in which CareSource "knowingly failed to provide required screening, assessment and case management for adults and children with special health care needs." The company submitted false data to Ohio to tap into incentive payments from Ohio's Medicaid program, according to the DOJ's release. There were two whistleblowers here, Laura Rupert and Robin Herzog, and they received a share of the $3.1 million settlement payment to the federal government.

Perhaps the best one of all is the case of Dr. Clifford J. Wolf, a San Diego podiatrist who claimed a pedicure was a medical procedure.

Also, as an interesting side note, the False Claims Act has many detractors, including legal scholars and defense attorneys who call it "a relic." Attorney Malcolm Harkins made a strong argument against the way the act is applied in a 2007 issue of Saint Louis University Journal of Health Law & Policy:

The financial consequences of running afoul of the FCA can be extraordinary. The statute not only provides for treble damages, it also authorizes penalties of up to $11,000 per claim.226 Lack of clarity regarding what constitutes a false or fraudulent claim within the meaning of the FCA often places extreme pressure on companies to settle otherwise unmeritorious suits to avoid risking financial ruin caused by an adverse ruling under the FCA. Because so much of healthcare delivered in the United States is paid for by the federal government, this situation is not good for the providers or for the public.

The article would make for an interesting read if you end up stuck in an airport on the way to Association of Health Care Journalists conference next week.

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Related Posts:

The False Claims Act: The law that makes fraud whistles blow

The False Claims Act: Go court hopping when shopping for fraud stories



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The False Claims Act provides a legal tool to counteract fraudulent billings turned in to the Federal Government. Claims under the law have been filed by people with insider knowledge of false claims which have typically involved health care, military, or other government spending programs

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Whistleblowers unhappy with the size of their rewards are permitted to challenge the amount in Federal Tax Court.

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