Hospital and Emergency Room Fraud
One of the most significant drivers of skyrocketing healthcare spending is the escalating costs of hospitalization and emergency room services. The average cost of an in-patient hospital stay has climbed over $2000 per day, while the median ER visit now costs 40% more than what the average American pays in monthly rent.
With those high costs comes the temptation for providers to commit fraud, waste, and abuse. Indeed, one of the primary reasons for the rise in health care costs has been the large volume of fraud committed against government health care programs, such as Medicare and Medicaid, on which so many patients rely to pay their hospital and emergency room bills.
Billions of dollars in health care fraud have been exposed, largely through the efforts of qui tam whistleblowers acting under federal and state False Claims Acts. Businesses and individuals have devised various schemes to defraud government health care programs. Examples of such fraudulent conduct include:
- Services Not Rendered: A provider submits a claim for diagnostic tests, treatments, or other health care services that were never rendered to the patient. A related fraud occurs when a provider bills for time not spent admitted in a facility, such as when a doctors writes an admission order late one day, but the patient does not enter the room until after midnight.
- Ghost Patients: A provider submits a claim for diagnostic tests, treatments, or other health care services for a patient who either does not exist or who never received the services billed for in the claim.
- Kickbacks: The federal Anti-Kickback Statute prohibits any offer, payment, solicitation or receipt of money, property, or remuneration to induce the referral of patients for services payable by a government health care program. These improper inducements can come in many different forms, including, but not limited to referral fees; finder’s fees; productivity bonuses; discounted leases; discounted equipment rentals; research grants; speaker’s fees; excessive compensation; and free or discounted travel or entertainment. Offering, paying, soliciting, or receiving kickbacks is not only a federal crime under the Anti-Kickback Statute, but it also may violate federal and state False Claims Acts.
Attorneys in the national qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti successfully represented the lead relator in one of the largest kickback cases in the history of New Jersey state false claims litigation, United States & State of New Jersey ex rel. DePace v. Cooper Health System, et al., 08-5626 (D.N.J.), which resulted in a $12.6 million recovery for federal and New Jersey taxpayers.
- Up-Coding Services: Government health care programs and private insurers are billed using a complex series of numerical codes that identify the specific procedure or service being performed. These code sets can include the American Medical Association’s Current Procedural Terminology (“CPT”) codes; Evaluation and Management (“E&M”) codes; Healthcare Common Procedure Coding System (“HCPCS”) codes; and International Classification of Disease (“ICD-9”) codes. Government health care programs assign a dollar amount it will pay for each procedure code. Up-coding occurs when a health care provider submits of a claim for a health care service represented by a more expensive code than the code for the service that actually was performed.
- Lack of Medical Necessity: Health care providers are required by law to document the medical necessity of the treatment or services for which they are seeking reimbursement. If a treatment or service is not medically necessary, government health care programs will not pay for it. Thus, claims made to government health care providers for treatment or services that are not medically necessary are fraudulent.
Attorneys in the national qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti successfully represented the relator in United States ex rel. Mason v. Community Heatlh Systems, Inc., 12-817 (W.D.N.C.), in which the nation’s largest operator of acute care hospitals was alleged to have knowingly billed government health care programs for inpatient services that patients did not need. Community Health Systems agreed to pay $98.15 million to resolve these matters.
The firm also represents the lead relators in United States ex rel. Mason v. Health Management Associates (“HMA”) et al., 10-47 (W.D.N.C.). The government has intervened in the relators’ allegations that HMA billed government health care programs for medically unnecessary emergency room services and paid remuneration to physicians in exchange for patient referrals.
- False Certification: When physicians, hospitals and other health care providers submit bills to government health care programs they are required to include a number of important certifications, including that the services were medically necessary, were actually performed, and were performed in accordance with all applicable rules and regulations. A common fraudulent scheme is to falsify these certifications in order to get a health care claim paid or to obtain additional business.
- Inflating Cost Reports: Medicare generally reimburses hospitals for certain overhead and costs. Hospitals are required to file cost reports that specify, among other things, charges, revenue, profits, and charge-to-cost ratios. Medicare then uses this information to determine how much it will pay for this overhead and other costs. Inflating costs on these reports constitutes fraud and may violate federal and state False Claims Acts.
Medicare can make cost “outlier” payments when a hospital’s cost-adjusted charges surpass certain cost formulas or other thresholds. Attorneys in the national qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti successfully represented the lead relator in one of the largest cases of Medicare “outlier” fraud in the history of false claims litigation, United States ex rel. Monahan v. St. Barnabas Health Care System, Inc. (D. N.J.), which resulted in a recovery of $265 million for federal taxpayers. The firm successfully represented similar claims on behalf of the same whistleblower in United States ex rel. Monahan v. Robert Wood Johnson University Hospital Hamilton (D. N.J.), in which federal taxpayers recovered $6.35 million.
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The lawyers in the national qui tam whistleblower practice of Pietragallo Gordon Alfano Bosick & Raspanti have proven, battle tested experience fighting for whistleblowers in federal and state false claims cases. The whistleblower practice group includes five former federal and state prosecutors who have:
- Recovered over $2 billion for federal and state taxpayers
- More than 30 years combined experience representing whistleblowers
- Fought some of the most complex cases brought under federal and state false claims acts
- Litigated against some of the largest companies in the United States
- Represented whistleblowers in federal and state courts across the United States
Some of our current whistleblower cases include:
- HDL, BlueWave, and related individuals
- Abbot Laboratories
- Health Management Associates (HMA)
- CVS Caremark Corporation
Some of our successful whistleblower cases include:
Supreme Foodservice AG
St. Barnabas Health
Medco Health Solutions
Community Health Systems, Inc.
Health Diagnostics Laboratory, Inc.
Fresenius Medical Care
Doshi Diagnostic Imaging Services
Cooper Health System
University of Pennsylvania
The Boeing Company
Christiana Care Health System