Fraud fighters use the federal False Claims Act, originally created to oversee the defense industry, to follow the money trail into healthcare. Last year, nearly 88 percent of about $3 billion dollars recovered through whistleblower-filed false claims cases came from U.S. Department of Health and Human Services contractors, The Pittsburg Post-Gazette reported.
In one such pending case, eight whistleblower lawsuits allege Florida-based hospital chain Health Management Associates used software, threats and financial incentives to leverage higher Medicare and Medicaid payments and boost admissions, as FierceHealthFinance reported.
Paying for information represents a large and growing governmental anti-fraud expense. Total recoveries through relator-filed False Claims Act lawsuits reached approximately $500 million in 1999 and $3 billion in 2012, the Post-Gazette noted. Typical recoveries in the last decade approached $3 million, including a relator's share of about $500,000. And companies accused of fraud tend to open their coffers when the government intervenes on the whistleblower's side, the article stated.
Case in point: Caremark, LLC, the pharmacy benefits manager operated by CVS Caremark Corporation, agreed to pay the federal government and five states $4.25 million to resolve allegations that it intentionally denied Medicaid claims payment on behalf of beneficiaries covered by both Medicaid and private insurers, as FierceHealthPayer previously reported.
Whistleblowers may include in-house complainants, according to CFO.com. In an amicus brief filed Thursday as part of a case in the Second U.S. Circuit Court of Appeals, the Securities and Exchange Commission wrote that internal whistleblowers should be protected from retaliation, refuting arguments that only those who report wrongdoing externally qualify for protection.
False Claims laws also exist at the state-level. But West Virginia lawmakers rejected a proposed bill last week that would have allowed whistleblowers to file lawsuits on behalf of the state government against companies that swindled it, The West Virginia Gazette noted. House members said the legislation would hurt business and clog the court system with petty lawsuits.