Improper Medical Billing Claims Give Rise to Costly Whistleblower Settlement

In the last decade, healthcare providers have seen a steady rise in whistleblower lawsuits under the False Claims Act (FCA).  A recent settlement out of the Northern District of Florida underscores the high cost of resolving such claims, which typically involve allegations of fraudulent billing practices.

A group of radiation oncology service providers in Pensacola, Florida paid $3.5 million to settle allegations that they billed Medicare, Medicaid and TRICARE for “unreasonable, unnecessary or medically improper radiation diagnosis and treatments” and submitted false claims to the insurance systems.  According to allegations by the Department of Justice (DOJ), the defendants improperly billed for treatments that were not supervised by a physician and billed for services that had not actually been rendered.  The DOJ further alleged that the defendants double-billed for certain treatments and misrepresented the nature of services provided to increase their bills.

In addition to the $3.5 million settlement agreement, the defendants entered into Integrity Agreements with the U.S. Department of Health and Human Services’ Office of Inspector General.  Pursuant to these agreements, the defendants are subject to heightened accountability and monitoring to prevent any future malfeasance.

The former employee who initiated the whistleblower suit received approximately $610,000 of the settlement amount, with the remainder going to the federal and state agencies affected.   

As this settlement illustrates, whistleblower claims can be extremely lucrative for current and former employees who file suit, particularly when the DOJ opts to intervene in the case.  As previously discussed, one consumer advocacy group has even established a website to facilitate medical industry whistleblowing, and the HHS plans to amend the agency’s Incentive Reward Program by raising from $1,000 to nearly $10 million the amount a whistleblower could receive for reporting Medicare fraud. Consequently, healthcare employers are likely to see an increase in FCA litigation moving forward. 

Photo credit:  Devonyu

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.