Medicare and Medicaid Fraud Whistleblower FAQ

The False Claims Act permits whistleblowers complaints regarding Medicare or Medicaid Fraud. These cases can be filed to anyone who directly or indirectly causes fraud in these health care programs. This also includes fraud in state-administered health care programs, based on federal matching money and because most states have now enacted local versions of the False Claims Act that permits whistleblower claims to recover wrongfully billed money from State governments.

This type of fraud means a medical provider – doctor, dentist, hospital, hospice care provider or nursing home – makes a fraudulent reimbursement claim. The most common types of Medicare or Medicaid fraud include: billing for unnecessary procedures or procedures that are never performed; for unnecessary medical tests or tests never performed; or for unnecessary equipment.

Medicare or Medicaid Fraud violates the False Claims Act. The False Claims Act is 31 USC § 3729-3733. The qui tam provisions of the False Claims Act allow persons and entities with evidence of Medicare and/or Medicaid Fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States government. In qui tam actions, the government has the right to intervene and join the action. If the government declines, the private plaintiff may proceed on his or her own. Most Medicare or Medicaid False Claims Act cases also include claims under state qui tam laws that are modeled on the federal False Claims Act.

• Billing Medicare and/or Medicaid for services not performed.
• Billing for services provided to ineligible persons.
• Defective or illegal pricing of drugs.
• Failure to comply with “best pricing” in the Medicaid program.
• Failure to properly enroll qualified patients in a Medicaid sponsored program.
• Nursing home abuses.
• Illegal or improper marketing of drugs.
• Overcharging at pharmacies.
• “Off label” marketing of drugs.
• Paying kickbacks to have doctors, hospitals or other care-givers prescribe certain drugs or otherwise bill the Medicare and/or Medicaid.
• Kickbacks to obtain business.
• Kickbacks to induce prescriptions.
• Performing unnecessary medical treatments.
• Improper referrals or self-dealing.
• Violations of various rules governing government procurement and contracting, such as the Stark Act, the Anti-Kickback Act and the Best Pricings laws.
• Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent Medicare and/or Medicaid claim for payment.
• Knowingly using (or causing to be used) a false record or statement to get a Medicare of Medicaid claim paid by the federal government.
• Conspiring with others to get a false or fraudulent Medicare or Medicaid claim paid by the federal government.
• Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government.
• Knowingly presenting (or causing to be presented) to the federal government a false or fraudulent Medicare and/or Medicaid claim for payment;
• Knowingly using (or causing to be used) a false record or statement to get a Medicare of Medicaid claim paid by the federal government;
• Conspiring with others to get a false or fraudulent Medicare or Medicaid claim paid by the federal government;
• Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay money or transmit property to the federal government

Any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit. However, if the government or a private party has already filed a False Claims Act lawsuit based on the same evidence of Medicare and/or Medicaid Fraud as you, you cannot bring a lawsuit.

A qui tam action must be confidentially filed under seal in federal district court in accordance with the Federal Rules of Civil Procedure. A copy of the complaint, with a written disclosure statement of substantially all material evidence and information of Medicare and/or Medicaid Fraud in the plaintiff’s possession, must be confidentially served on the US Attorney General and the US Attorney for the district in which the complaint is brought. An action under the False Claims Act must be filed, in camera and under seal. The complaint and its contents must be kept confidential until the seal is lifted. The complaint is not served on the defendant. If the plaintiff violates the provisions of the seal, his or her complaint could be dismissed.

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. A qui tam plaintiff can receive between 15 and 30 percent of the total recovery from the defendant, whether through a favorable judgment or settlement. To be eligible to recover money under the Act, you must file a qui tam lawsuit. Merely informing the government about the violation is not enough. You only receive an award if, and after, the government recovers money from the defendant as a result of your suit.

Under the False Claims Act, an action must be filed within the later of the following two time periods: Six years from the date of the violation of the Act; or three years after the government knows or should have known about the violation, but in no event longer than ten years after the violation of the Act.

Under the “first to file” rule, it is to your advantage to file a qui tam lawsuit as quickly as possible, as only the “first to file” is eligible for a reward, regardless of whether or not a complaint is filed within the statute of limitations.

Under Section 3730(h) of the False Claims Act, 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 to make the employee whole. Such relief may include:

• Reinstatement
• Double back pay
• Compensation for any special damages including litigation costs and reasonable attorneys’ fees.

You should be aware, however, that the scope of whistleblower protection under Section 3730(h) is an issue that currently divides the courts. Many states have wrongful discharge or other employment laws that may provide other remedies for such discrimination. The Statute of Limitation for filing an FCA retaliation case is different than that for filing a qui tam recovery case. An FCA retaliation case must be filed under the statute of limitation applicable to the most closely analogous state statute.

The importance of using financial incentives to promote corporate fraud disclosures was underscored in a scholarly study published in the Boston University Law Journal. This study analyzed several possible methods of incentivizing whistleblowing and concluded that a qui tam model provides the greatest incentive for the whistleblower while exposing information that the government would not be able to detect on its own. “Qui tam cases bring out important inside information. Potential qui tam plaintiffs can offer information about inchoate or ongoing malfeasance of which law enforcement is unaware.” After examining the potential disincentives that qui tam whistleblowers may confront, the article notes that “the bounty a relator stands to gain does, in many cases, outweigh the disincentives to being a whistleblower.

If you need additional help or want to contact an attorney, please fill out a confidential intake form. To learn more about how NWC assists whistleblowers, please visit our Find an Attorney page.

For additional information on Medicaid and Medicare Fraud whistleblower rights, please read Rules 1-3, 6, 30, and Checklists 1 and 4 published in The New Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself (Lyons Press, 2017).