The federal government loses several billion dollars a year due to fraudulent and otherwise improper claims for payment by hospitals, doctors, medical-device manufacturers, and others in the health care field. These overpayments, of course, have to be offset by higher taxes and/or reduced spending on programs that benefit Americans.

How is healthcare fraud perpetrated?

This overcharging can take a variety of forms. A hospital or physicians’ practice can bill Medicare, Medicaid, or TriCare for procedures that are not medically necessary.1 A pharmaceutical company manufacturer can mislead the government about side effects if government funds are used for development or purchase of its drugs.2

Upcoding” is another common method of fraud; for example, a healthcare practice that bills Medicare for providing treatment via licensed doctors violates the law if its patients were seen by nurse practitioners or other non-physicians.3 Some of these cases involve outright fraud, with the provider intentionally lying to line its pockets. But North Carolina law and federal law also penalize reckless billing and invoicing errors that result in overpayment.4

The False Claims Act (“FCA”) allows for lawsuits to recover these improperly billed amounts. A recovery can be as large as three times the amount of the improper billing, plus costs, expenses, and attorney fees associated with the litigation. In the 2019‒20 fiscal year, these recoveries totaled more than $2.2 billion. More than $1.8 billion of this was recovery of improper health-care billing.5

What is a “whistleblower”?

A whistleblower can sue on the government’s behalf in a “qui tam” lawsuit. Lawsuits brought by whistleblowers (also known as “relators”) accounted for 88.5 percent of the $24.8 billion in FCA judgments and settlements between 2011 and 2020.6 The whistleblower can be anyone who has non-public knowledge about the fraud or improper billing. It can be an employee at a hospital or doctor’s office that takes Medicaid or Medicare. It can even be a competing medical practice.

How much money is a healthcare fraud whistleblower entitled to?

The law entitles the whistleblower of healthcare fraud or improper billing to 15% to 30% of the settlement or court judgment. Whistleblowers’ shares of judgments in fiscal 2019‒20 came to nearly $262 million, not including awards of attorney fees and expenses.

How is healthcare fraud uncovered?

Fraud and other improper billing practices are sometimes open secrets within the company that perpetrates them. In one FCA case, the Atlanta-based defendant had e-mailed all of its doctors telling them to enter their provider codes for patient encounters as if both the doctor and a nurse practitioner or physician’s assistant had been there.7 A doctor who later sued as the whistleblower realized this would have meant he saw an average of 54 patients per day – an impossibility for him.

In another FCA case, a regional supervisor at a national pharmacy chain discovered in the course of a routine audit that numerous orders from a prescription-management company, which acted as a middleman between nursing homes and pharmacies, were not backed up by actual prescriptions. After investigating, he concluded that the prescription-management company had created a software program to renew prescriptions automatically without authorizations from actual physicians.8

Can I be fired for becoming a whistleblower?

The federal FCA and its North Carolina counterpart both protect whistleblowers from retaliation, including the following:

  • termination
  • suspension
  • demotion
  • harassment
  • post-termination retaliation such as blacklisting9

An employer or contractor who suffers retaliation may be entitled to “all relief necessary” to make him or her whole. This includes reinstatement in the job, double the amount of back pay lost as a result of termination, and attorney fees. A terminated employee or other person who suffers retaliation may be entitled to this compensation even without proving that the employer/contractor made false claims for payment.10

A retaliating employer often argues that the whistleblower was fired for job performance or other reasons unrelated to the FCA activity, but the burden is on the employer to prove that it would have taken the action based on those other reasons.

What should I do if I suspect healthcare fraud or improper billing?

If you suspect or know of healthcare fraud or improper billing, you should contact an experienced whistleblower attorney.

A whistleblower with first-hand knowledge of healthcare fraud can file a lawsuit “under seal”, meaning that it is not made public and cannot be found in a search of the court’s database. The defendant is not immediately notified and is not immediately obligated to respond to the lawsuit. Government attorneys are notified so that they can investigate and then decide whether or not to take control of the lawsuit. Once the government makes its decision, the case is unsealed, and the defendant is notified and required to respond. A defendant will not be held liable unless it knew or should have known about the improper billing; working together, you and your healthcare fraud attorney can help you determine if the company had the legally required level of awareness. This may require further investigation in some instances.

Further investigation is absolutely crucial if you suspect healthcare fraud but do not have first-hand knowledge of it or know details of how it has been perpetrated.

Either way, you should act in a timely manner and contact an experienced healthcare fraud attorney. First, statutes of limitation apply to FCA lawsuits. Moreover, a court will dismiss your case if a different whistleblower has already filed a case that is similar enough that the government’s investigation would have eventually led it to discover the same facts alleged in your lawsuit.11

NC Whistleblower Attorneys. Want to Talk?

With over half of the government’s fraud recovery in the healthcare industry, healthcare fraud has reached epidemic proportions. While it is the courageous whistleblower who reports 80% of fraud that is exposed, the vast majority of fraud against the government goes undetected.

If you suspect fraud against the federal or state government, let’s talk. We are here to help put you at ease as we try to help you determine — confidentially and discreetly — if you should move forward with a whistleblower/qui tam claim. We appreciate the struggle you may be facing. That is why we have a You-First policy in place. We will try to help protect you regardless of your involvement.

Contact us or call 1-844-520-2889.

If we decide to take your case and you don’t get a reward for reporting fraud, you owe us nothing.

1 See, e.g., Winter ex rel. United States v. Gardens Reg’l Hosp. & Med. Ctr., 953 F.3d 1108 (9th Cir. 2020).

2 United States Dep’t of Justice, Indivior Solutions Pleads Guilty To Felony Charge And Indivior Entities Agree To Pay $600 Million To Resolve Criminal And Civil Investigations As Part Of DOJ’s Largest Opioid Resolution (Jul. 24, 2020), https://www.justice.gov/opa/pr/indivior-solutions-pleads-guilty-felony-charge-and-indivior-entities-agree-pay-600-million.

3 United States ex rel. Sonyika v. Apollo MD, Inc., No. 1:20-CV-03213-AT, 2021 WL 1222379, at *2 (N.D. Ga. Mar. 31, 2021).

4 See 31 U.S.C. § 3729(b)(1).

5 United States Dep’t of Justice, Justice Department Recovers Over $2.2 Billion from False Claims Act Cases in Fiscal Year 2020 (Jan. 14, 2021), https://www.justice.gov/opa/pr/justice-department-recovers-over-22-billion-false-claims-act-cases-fiscal-year-2020.

6 See United States Dep’t of Justice, Fraud Statistics – overview, October 1, 1986 – September 30, 2020 (Jan. 14, 2021), https://www.justice.gov/opa/press-release/file/1354316/download.

7 Am. Compl. ¶¶ 1215, United States ex rel. Sonyika v. Apollo MD, Inc., No. 1:20-CV-03213-AT, (N.D. Ga. Oct. 27, 2019), ECF No. 45, available at https://media.bizj.us/view/img/11830834/us-vs-apollomd-amended-complaint.pdf.

8 United States v. Omnicare, Inc., No. 1:15-CV-4179-CM, 2021 WL 1063784, at *4 (S.D.N.Y. Mar. 19, 2021); Compl. ¶¶ 6064, United States v. Omnicare, Inc., No. 1:15-CV-4179-CM (June 1, 2015), ECF No. 16.

9 31 U.S.C. § 3730(h); N.C. Gen. Stat. § 1-613; see United States ex rel. Felten v. William Beaumont Hosp., No. 20-1002, 2021 WL 1204981, at *5 (6th Cir. Mar. 31, 2021), available at https://www.opn.ca6.uscourts.gov/opinions.pdf/21a0077p-06.pdf.

10 See, e.g., United States ex rel. Yesudian v. Howard Univ. 153 F.3d 731, 739 (D.C. Cir. 1998); United States ex rel. Nowak v. Medtronic, Inc., 806 F. Supp. 2d 310, 358 (D. Mass. 2011).

11 United States ex rel. Carson v. Manor Care, Inc., 851 F.3d 293, 303 (4th Cir. 2017).

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