Medicare & Medicaid Fraud: Miami’s $1 Billion Dollar Case

Medicare & Medicaid Fraud: Miami’s $1 Billion Dollar Case

By: Daniela Carrion

In July 2016, the Department of Justice announced that it is prosecuting perhaps the largest healthcare fraud case in the history of the federal False Claims Act.  The case involves a network of Florida nursing facilities that orchestrated an elaborate scheme to defraud Medicare and Medicaid of more than $1 billion over the last 14 years.

The fraud perpetrated includes allegations of hush money to witnesses, bribes to Miami doctors, and laundering of profits through shell companies. With help from doctors, healthcare consultants, pharmacists, and other medical personnel who received kickbacks for their roles, the facilities billed Medicare and Medicaid for medical procedures, drugs, and equipment that was not  needed or in many instances ever received.  In some of the more egregious cases, patients would be given narcotics in order to remain longer in the care facilities than needed.

In the last decade, fraudulent billings have led to over 2,900 charges and fraudulent billing of over $10 billion dollars.  In the employment world, more often than not, an employee will find out that their employer was committing fraud against a federal program and may attempt to voice their concern, and then find themselves being retaliated against because of their noble opposition.  In many cases, they are subjected to an orchestrated campaign of harassment and false accusation and eventually terminated.

Employees are usually the best situated to find out whether a company is committing fraud and in most cases be eligible to file a lawsuit.  The employee Plaintiff is referred to as the “relator” as they are relating the fraud at issue in the case.  The False Claim Act allows a person or entity with evidence of fraud to sue the wrongdoers on behalf of the United States Government and thereby expose fraud that may have otherwise gone unreported.  In these cases, the government has the right to intervene and join the action and take the lead in prosecuting the case.  A False Claims Act case is filed confidentially and under seal in a federal district court.  While the case is under seal, the government investigates the claim without disclosing to the defendant the private plaintiff who filed the action.

Some violations that are considered a False Claim are:

  • Charging for services or supplies not provided;
  • Upcoding and Unbundling;
  • Falsifying or failing to maintain proper records;
  • Off-label marketing by pharmaceutical or medical device companies;
  • Unlawful kickbacks or financial arrangements; and
  • Cost related Fraud.

Violators of the False Claims Act are liable for three times the dollar amount that the government is defrauded, and civil penalties of $5,000 to $10,000 for each false claim.  An employee who files the claim can receive between 15 and 30% of the total recovery from the Defendant. Additionally, any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary, including double back pay and compensation for any special damages, and litigation costs and attorney’s fees.

To be eligible to recover money under the False Claim Act, one must file an actual lawsuit as merely informing the government about the violation is not enough.