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Close-up views of False Claims Act cases paint bigger picture


Implementing the federal False Claims Act resulted in $5.69 billion in recoveries in fiscal 2014, nearly $3 billion of it linked to whistleblower lawsuits, WOWT NBC News reported. The number of lawsuits filed under the whistleblower provisions topped 700 in fiscal 2014 for the second consecutive year. Underlying these cumulative results, recent headlines describe the workings of the law in fraud cases successfully and unsuccessfully brought.

Narinder S. Grewal, M.D., for example, operator of a San Fernando Valley, California pain management clinic, agreed to pay $1,087,176.09 to the United States and $112,823.91 to the state to settle allegations of receiving improper payments from Medicare, MediCal and TRICARE, according to Hometown Station KTHS. The lawsuit alleged that Grewal filed claims under inflated procedure codes. The case was brought by whistleblower Chandana Basu, who handled billing at Grewal's clinic. Basu will collect $204,000.

Elsewhere in California, Julia Zeman filed a case against USC University Hospital alleging Medicare fraud in connection with orthopedic surgery. The operation cost Zeman an extra $96 after the hospital acquired the ambulatory surgical center she used, JD Supra Business Advisor reported.

The charges were for post-operative care. Under Medicare regulations, provider-based facilities can bill for this follow-up within 90 days after surgery, but other facilities cannot. Zeman argued that her ambulatory surgical center wasn't provider-based. The court gave the hospital a summary judgment since this argument wasn't part of Zeman's initial or amended complaints.      

Finally, in Illinois, the U.S. Court of Appeals for the Seventh Circuit upheld the dismissal of a case against Shopko Operating Stores, LLC, The National Law Review reported. A pharmacist accused the stores of overbilling Medicaid.  

The relator said Shopko violated federal assignment law for Medicare and Medicaid-eligible beneficiaries. Specifically, the pharmacist accused the company of seeking inflated Medicaid payments by not submitting patient copayment information to Medicaid. 

The appeals court called the relator's interpretation of Medicaid assignment law "strained," and said a relator may not sufficiently claim that corporation behaved with reckless disregard "simply by virtue of its size, sophistication or reach," The National Law Review noted.

For more:
- here's the WOWT NBC News article
- read the Hometown Station KHTS article
- see the JD Supra Business Advisor article
- view The National Law Review article

Related Articles: 
What payers need to know about the False Claims Act
Whistleblowers gain power in government anti-fraud efforts
DaVita Healthcare Partners settles False Claims case for $389M
Healthcare groups argue against excessive False Claims Act penalties
Feds trumpet 'banner year for civil fraud recoveries