What are the Potential Medicaid Fraud Penalties?

By Joy Clairmont

The potential penalties for healthcare providers found liable for committing Medicaid fraud are significant. If an entity is liable for Medicaid fraud in violation of the False Claims Act, the possible penalties include: civil monetary penalties for each false claim submitted, treble damages based on the amount defrauded from Medicaid, costs, fees and expenses. If you have knowledge about potential Medicaid fraud, you may pursue a qui tam lawsuit as a whistleblower and possibly receive a portion of these Medicaid fraud penalties.

Incentives for Whistleblowers to Report Medicaid Fraud

The False Claims Act allows for individuals with evidence and knowledge of fraud committed against the government to file a case on behalf of the government. If the government recovers money from such a case, the individual may be entitled to an award or a percentage of the recovery, ranging from 15-30% of the recovery.

Medicaid Program Fraud

The Medicaid Program is often a target for fraud. Medicaid is an extensive government health insurance program for low-income residents, children, the elderly and disabled individuals. Medicaid Program spending tops over $550 billion per year.

Each State’s Medicaid Program covers a range of medical benefits including inpatient hospital services, home health services, laboratory tests and ambulance transportation to medical care. States’ Medicaid Programs are jointly funded by the Federal and State governments. As such, if you know of a potential Medicaid fraud case, it could be brought under the Federal and State False Claims Acts and, if successful, you would be entitled to a share of the recovery.

Specific Medicaid Fraud Penalties

There have been many successful Medicaid fraud cases brought by whistleblowers pursuant to the Federal and State False Claims Acts against a variety of healthcare providers, such as hospitals, pharmacies and drug companies. The penalties in these cases have included:

-Treble Damages: This is the most significant penalty in Medicaid fraud cases. Damages are calculated by taking the amount fraudulently received from the government in reimbursement (or fraudulently underpaid to the government) and multiplying that amount by three. 31 U.S.C. § 3729(a)(1). This is referred to as “treble damages.”

-Civil Monetary Penalties: Civil monetary penalties are assessed on a per claim basis. This means that each individual false claim carries its own penalty. Thus, for a court to impose a civil penalty, it must first determine how many distinct violations occurred. The current minimum penalty per claim is $10,957, and the current maximum penalty per claim is $21,916.

-Attorneys’ Fees, Costs and Expenses: In addition, a successful whistleblower is entitled to the reimbursement of attorneys’ fees, costs, and expenses.

Berger Montague’s Successful Medicaid Fraud Cases

Berger Montague has a long track record of bringing successful Medicaid fraud cases on behalf of qui tam whistleblowers and recovering hundreds of millions of dollars for the government. Some of the Firm’s noteworthy cases include:

-United States ex rel. Rinehart v. Walgreen Co., Case No. 2:14-cv-0148 (E.D. Cal): This Medicaid fraud case against Walgreens settled for $9.86 million in April 2017. The settlement resolved allegations that Walgreens falsely billed California’s Medicaid Program, Medi-Cal, in violation of the False Claims Act and the California False Claims Act. The lawsuit alleged that Walgreens improperly billed Medi-Cal for certain prescription drugs, “Code 1” drugs, appearing on Medi-Cal’s formulary list. As alleged, Walgreens knowingly failed to comply with applicable “Code 1” drug restrictions and documentation requirements by failing to ensure that the drugs were prescribed for the requisite diagnoses prior to dispensing the drugs to Medi-Cal beneficiaries.

-United States ex rel. Streck v. AstraZeneca, LP, et al., C.A. No. 08-5135 (E.D. Pa.): a Medicaid rebate fraud case which settled in 2015 for a total of $55.5 million against three pharmaceutical manufacturers: AstraZeneca, Cephalon, and Biogen.

-United States ex rel. Kieff and LaCorte v. Wyeth and Pfizer, Inc., Nos. 03-12366 and 06-11724-DPW (D. Mass.): a Medicaid rebate fraud case involving Wyeth’s acid-reflux drug, Protonix, which settled for $784.6 million in April 2016.

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By | 2018-03-25T12:38:42+00:00 December 13th, 2017|Medicaid Fraud|