Medical Justice provides free consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. If you are navigating a medico-legal obstacle, visit our booking page to schedule a free consultation – or use the tool shared below.

Sometimes doctors find themselves in toxic work relationships. Perhaps they’ve joined a group or healthcare institution, wildly idealistic, and ready to do the best job possible. Soon, they learn about the corporate culture. It’s not pretty. There may be some backstabbing. Poor communication. Rotten service. But, if they keep their head down, they can stay out of the crossfire.

Then, they learn about billing fraud. With their name being used to submit insurance claims.

Now what?

If the claim is in your name, and you take no action, you may get caught in the inevitable dragnet. It’s not a good idea to remain willfully blind when your license and freedom are on the line. The carriers (including the federal and state government) will want their money back.

Enter the False Claims Act. What’s that?

It’s easier just to quote directly from the Department of Justice website.

Many of the [DOJ] Fraud Section’s cases are suits filed under the False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733, a federal statute originally enacted in 1863 in response to defense contractor fraud during the American Civil War.

The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty of $2,000 for each false claim.  The FCA has been amended several times and now provides that violators are liable for treble damages plus a penalty that is linked to inflation.

In addition to allowing the United States to pursue perpetrators of fraud on its own, the FCA allows private citizens to file suits on behalf of the government (called “qui tam” suits) against those who have defrauded the government.  Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery.  Many Fraud Section investigations and lawsuits arise from such qui tam actions.

The Department of Justice obtained more than $2.2 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2022.

Qui Tam lawsuits allow private citizens to step into the shoes of the government to prosecute claims against fraudsters. Sometimes the government will then step in and take over. Sometimes, they take a pass and allow the person with insider information to go all the way. If money is collected, some of what is collected is used to pay the one who provided the information to make this happen. The whistleblower wins the lottery.

A payday for turning in the fraudster.

Of the more than $2.2 billion in False Claims Act settlements and judgments reported by the Department of Justice this past fiscal year, over $1.7 billion related to matters that involved the health care industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians. The amounts included in the $1.7 billion reflect recoveries arising only from federal losses, and, in many of these cases, the department was instrumental in recovering additional amounts for state Medicaid programs.

As noted above, the $2.2 billion addressed money collected by the federal government. State governments also got in on the action.

And some states have unique laws which allow for collection of whistleblower awards related to fraud against private insurers.

In 2015, there was a $22.75 million settlement with Warner Chilcott (pharmaceutical manufacturer)—invoking California Insurance Frauds Prevention Act (CIFPA) involving fraud against private health plans. The plaintiff whistleblower received 49% of the recovery.

Back to federal whistleblower cases.

In 1986, Congress strengthened the False Claims Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. Qui tam cases may be pursued by the government or the whistleblower, and this past year significant recoveries were obtained by both. When a qui tam action is successful, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15% and 30%. Whistleblowers filed 652 qui tam suits in fiscal year 2022, and this past year the department reported settlements and judgments exceeding $1.9 billion in these and earlier-filed suits.

The list of whistleblower or government audited lawsuits alleging healthcare fraud is long.

Select highlights.

Carrefour Associates LLC and its related companies, which operate under the name Crossroads Hospice, paid $5.5 million to resolve allegations that Crossroads Hospice knowingly submitted false claims to Medicare for hospice services for patients who were not terminally ill.

Signature Home Health Services of Florida LLC and its related entities (collectively, SignatureHomeNow) paid $2.1 million to resolve allegations that SignatureHomeNow improperly admitted and provided services to Medicare beneficiaries who: (i) were not homebound; (ii) did not require certain skilled care; (iii) did not have valid or otherwise appropriate plans of care in place; and/or (iv) did not have appropriate face-to-face encounters needed to be appropriately certified to receive home health services.

Hayat Pharmacy paid $2.05 million to resolve allegations that it submitted false claims to Medicare and Medicaid for prescription medications that the pharmacy had switched from lower cost medications to higher cost medications without any medical need and/or a valid prescription.

The department also resolved several matters in which providers billed federal health care programs for unnecessary drug testing. Physician Partners of America LLC (PPOA), its founder, its former chief medical officer, and certain of its affiliated entities paid $24.5 million to resolve allegations that they billed federal health care programs for unnecessary urine drug, psychological, and genetic testing. The United States alleged that PPOA required its physician-employees to order multiple urine drug tests at the same time without determining whether any testing was reasonable and necessary, or even reviewing the results of initial testing to determine whether additional testing was warranted. Similarly, the United States alleged that PPOA instructed physicians to automatically order psychological and genetic testing that it did not use or intend to use, and that PPOA instructed physicians to schedule bi-weekly telehealth appointments for the sole purpose of increasing revenue during the pandemic. Finally, the United States alleged that, at the time PPOA was engaged in this conduct, it obtained a loan under the Paycheck Protection Program while certifying that it was not engaged in illicit activity. This settlement resolved allegations under the False Claims Act, the Physician Self-Referral Law (Stark Law), and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

MD Spine Solutions LLC dba MD Labs Inc. and two of its owners agreed to pay up to $16 million to resolve allegations that MD Labs submitted claims for medically unnecessary urine drug tests.

Who is motivated to file qui tam lawsuits? Employees with a conscience. Employees who were fired for speaking up. Employees on the receiving end of demotions, pay cuts, bullying. Employees who asked their boss to fix a problem and were told to shut up. Ex-spouses with insider information.

As you can see above, whistleblowers who win their case (or contributed to the government winning its case), can receive quite a handsome payday; sometimes enough to live on for the rest of their life.

None of this is to suggest the process is easy. But if you see fraud and the problem is not timely remedied, there are incentives to speaking up.

What do you think?

Medical Justice provides free consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. If you are navigating a medico-legal obstacle, visit our booking page to schedule a free consultation – or use the tool shared below.

Jeffrey Segal, MD, JD

Chief Executive Officer and Founder

Dr. Jeffrey Segal, Chief Executive Officer and Founder of Medical Justice, is a board-certified neurosurgeon. Dr. Segal is a Fellow of the American College of Surgeons; the American College of Legal Medicine; and the American Association of Neurological Surgeons. He is also a member of the North American Spine Society. In the process of conceiving, funding, developing, and growing Medical Justice, Dr. Segal has established himself as one of the country’s leading authorities on medical malpractice issues, counterclaims, and internet-based assaults on reputation.

Dr. Segal was a practicing neurosurgeon for approximately ten years, during which time he also played an active role as a participant on various state-sanctioned medical review panels designed to decrease the incidence of meritless medical malpractice cases.

Dr. Segal holds a M.D. from Baylor College of Medicine, where he also completed a neurosurgical residency. Dr. Segal served as a Spinal Surgery Fellow at The University of South Florida Medical School. He is a member of Phi Beta Kappa as well as the AOA Medical Honor Society. Dr. Segal received his B.A. from the University of Texas and graduated with a J.D. from Concord Law School with highest honors.

In 2000, he co-founded and served as CEO of DarPharma, Inc, a biotechnology company in Chapel Hill, NC, focused on the discovery and development of first-of-class pharmaceuticals for neuropsychiatric disorders.

Dr. Segal is also a partner at Byrd Adatto, a national business and health care law firm. Byrd Adatto was selected as a Best Law Firm in the 2023 edition of the “Best Law Firms” list by U.S. News – Best Lawyers. With over 50 combined years of experience in serving doctors, dentists, and other providers, Byrd Adatto has a national pedigree to address most legal issues that arise in the business and practice of medicine.