Most doctors, health care providers and suppliers who work with health care programs and Medicare are honest. However, there are a few bad actors who are not.
Medicare and healthcare fraud occurs when you bill Medicare or another federal health care program for services and/or supplies that you did not receive. Medicare and healthcare programs lose billions annually to fraud.
Both Medicare and healthcare programs are placing more of a priority than ever on attempting to find and prevent fraud and abuse in the system.
Federal Medicare Fraud Laws
There are five laws pertaining to Medicare fraud and abuse on the federal level. Note that doctors must comply with many laws regarding Medicare and health care – at the state and federal levels. These major laws are:
The False Claims Act
This Act allows private US citizens to sue people who commit fraud against government programs. It allows for as high as treble damages and also will provide awards from 15-30% of recoveries for people who bring successful claims. This law is regarded as the most important way for taxpayers to recover many billions of dollars that are stolen by fraud by government contractors every year.
The False Claims Act has what is called qui tam or whistleblower sections. Qui tam is a mechanism in the Act that lets citizens with evidence of fraud against government contracts and programs to sue to recover funds that have been stolen. For compensation for the risk of filing such a claim, the whistleblower can be awarded a part of the funds that are recovered. This amount is typically between 15% and 25%. A qui tam suit remains under seal for at least 60 days. In that time, the Department of Justice can investigate and decide if they should join the action. Most seals usually are extended at least once. It is not unusual for a case to remain under seal for years.
The Civil Monetary Penalty Law
This law authorizes the bringing of civil penalties against a person or entity that engages in illegal activities that presents or causes to be presented any claim for services that are not provided as claimed, or which is fraudulent in any way. Also, knowingly giving any misleading information that could influence a decision to have a patient discharged. Penalties also can be imposed for giving compensation to any beneficiary of a federal health care program that could influence receipt of services or any reimbursable items.
The Secretary of Health and Human Services has the authority to prevent individuals and organizations from participating in any federal health care program per the Civil Monetary Penalty Law.
The Office of the Inspector General or OIG can seek monetary penalties of up to $10,000 for every service item that is claimed improperly.
The Anti-Kickback Statute
This is a criminal statute that prohibits exchanging anything of value in an attempt to induce or reward the referral of any type of federal health care program business. Being convicted for a violation of this statute can result in a fine as high as $25,000 and being put in prison for up to five years.
The government also can assess a civil money penalty, which can result in treble damages, as well as $50,000 for each violation of the statute. When a citizen sues on behalf of the US government and wins, they will receive part of the ultimate recovery amount for their efforts as a whistleblower.
The Physician Self-Referral Act
This Act is commonly called the Stark Law. It disallows a doctor from making referrals for certain health care services that are payable by Medicare to an organization or entity that he has a financial relationship with. It also disallows the organization from presenting or causes to be presented any claims to Medicare for any of those referred services.
Third, it sets up several exceptions and allows the Health and Human Services Secretary to create exceptions to the law regarding financial relationships that do not pose any risk of abuse. Some of these include physical therapy services, clinical lab services, radiation therapy services, home health services, outpatient prescription drugs, and durable medical equipment and supplies.
Each of these laws are enforced by the Department of Justice, the Office of the Inspector General, and the Department of Health and Human Services.
Medicare & Healthcare Fraud Examples
Some examples of this type of fraud include the following:
- A provider of healthcare services bills Medicare for services that it never did.
- A supplier bills the Medicare program for equipment that a patient never received.
- A person uses the Medicare care of another person to receive healthcare supplies, equipment or care.
- A firm offers a drug plan by Medicare but has not been approved by the program
- An organization uses fake information to dupe you into joining a Medicare or healthcare plan.
Federal Medicare & Healthcare Fraud Punishment
Doctors or healthcare organizations that have committed this type of fraud will face serious consequences. This type of crime means that you will have to repay any Medicare overpayments that you received. You also will face severe financial fines. It also is possible that you will face prison time. A typical sentence for Medicare and healthcare fraud is five years for every offense.
You also can be fined up to $250,000 per offense, and an organization can be fined up to $500,000 per offense. Probation of 12 months per offense also is common.
Federal Medicare & Healthcare Fraud Statute of Limitations
According to Federal Statute 18 USC 3282, you are protected from prosecution from any noncapital crime if the indictment does not occur within five years. In the majority of cases, noncapital federal crimes that do not meet such guidelines are unable to be prosecuted. Still, note that the consequences of even a charge of Medicare fraud can be severe. The damage to the reputation of a healthcare professional or organization can be severely damaging. Thus, it is very important for you to obey the letter of the law when it comes to Medicare and healthcare program reimbursements.
Federal Medicare & Healthcare Fraud Cases
Six Arrested in Florida for Medicare Fraud – Several people in Tallahassee FL were arrested and charged with Medicare fraud last week. The six were case managers at a health care organization and were charged with $170,000 in fraud.
WI Medical College Pays $840,000 to Resolve Fraud Case – The Medical College of WI has paid $840,000 to settle Medicare fraud claims that it tried to bill the program for surgeries that teaching doctors were not properly overseeing surgical residents.
Detroit Doctor Sentenced to 15 Months In Prison for Healthcare Fraud – A doctor from Redford Township in Michigan was sentenced this week to 15 months in prison. The crime was a $2.1 million home health care fraud scheme.