What is the Difference Between Fraud and Abuse?

The qui tam statutes permit whistleblowers to report companies engaged in either “fraud” or “abuse” directed against the United States to the government. If this information leads to a successful qui tam lawsuit, the whistleblower is eligible to receive a portion of any monetary recovery the government receives. Many states have similar laws.

Typically, qui tam cases in the public health area assert claims on behalf of the state and federal government due to practices that cost money to Medicaid or another healthcare program, such as those run by the Veterans Administration.

Healthcare Fraud and Abuse

Healthcare “fraud” has been described by one scholar in the field as an intentional attempt to wrongfully collect money relating to medical services, while healthcare “abuse” has been described as actions which are inconsistent with acceptable business and medical practices. There can be important differences. Both practice can result in a financial loss to the United States, and either can form the basis for a whistleblower lawsuit.

Healthcare Fraud

In a fraud case, there must be a false statement to the government. For example, a nurse who submits claims to Medicaid for giving blood pressure tests to 200 Medicaid patients, when she has actually given tests to only 100 patients, has made a false statement – or possibly 100 false statements. If Medicaid provided payments for the non-existent tests, it has been defrauded and may sue for return of the improperly obtained money.

Healthcare Abuse

But not all improper acts that cost the Medicaid system money are fraud. For example, The Stark Act and Medicaid regulations forbid doctors from paying kickbacks to other doctors to receive patient referrals. Payment of such kickbacks may not be fraud if the doctor didn’t make any statement to the government. However, it is nevertheless an abusive practice that results in the government paying more for medical services than it should.

Berger Montague has brought several qui tam cases to recover profits from such practices on behalf of the Unite States. One Stark Act case against Recovery Home Care and its officers settled in 2016 for $1.1 million. Berger Montague is also litigating several cases involving the Stark Act that remain under seal.

Similarly, Berger Montague has represented whistleblowers against pharmaceutical companies that bribed doctors to prescribe particular drugs, instead of drugs manufactured by their competitors that are less expensive, more effective, or have fewer side effects.

This practice increases the drug company’s profits at the expense of Medicaid, which pays higher prices than it should, or may pay for additional medical treatment that could have been avoided by a different prescription. The drug company has not made any statement to Medicaid, but has engaged in an abusive practice—an especially pernicious one, since it may hurt patients as well as enrich the drug company at the expense of the Medicaid program.

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By | 2019-03-25T10:02:48+00:00 June 20th, 2018|Healthcare Fraud|