A doctor in Stratford, Connecticut recently agreed to pay a $700,000 settlement to the United States government to resolve charges of Medicare overbilling under the False Claims Act. At the same time, a mental healthcare facility located in New Hampshire agreed to pay the state $54,281.76 to resolve claims that under New Hampshire’s False Claims Act, the hospital fraudulently billed Medicaid for amounts that did not correctly correspond to the services that were actually provided.New Hampshire’s Medicaid Fraud Control Unit discovered the fraud.
The Connecticut physician named in the case, Dr. James P. Ralabate, owns Primary Care Associates located in Stratford, Connecticut. Dr. Ralabate allegedly made visits to multiple nursing homes between the years of 2006 and 2011, all the while billing Medicare for high-level physician services despite the fact that these intricate services were not medically necessary. Federal Medicare and Medicaid programs do not reimburse physicians for medically unnecessary services, prescriptions or medical devices. Therefore, those providers who bill Medicare and Medicaid for medically unnecessary services are essentially submitting false claims for payment in violation of the False Claims Act.
When Medicare reimburses for medically unnecessary services, it makes a payment to providers which they are not entitled. Furthermore, the government alleged that in some cases, Dr. Ralabate submitted bills for services supposedly administered to nursing home residents when the patients were not even current patients of the nursing homes.
Meanwhile, the New Hampshire case contains allegations that the Greater Nashua Mental Health Center improperly billed Medicaid between the years of 2008 and 2012 for psychosocial rehabilitation services that did not warrant reimbursement. Medicaid is the federal program administered to patients in conjunction with state healthcare programs. Twenty-nine states and the District of Columbia have all enacted state false claims acts as a means to supplement the federal statute, although only ten of those states provide for cases of Medicaid fraud.
Each of the settlements reinforces the depth of fraud and abuse in federal and state health programs. They also illustrate an ongoing threat to long-term solvency, and the importance of the federal and state false claims act statutes as vital and necessary tools to fight health care fraud.
The federal False Claims Act is a crucial tool that is available to the federal government in order to combat fraud and abuse. The False Claims Act law was originally enacted in 1863. Notably successful, the statute single-handedly led to the recovery of billions of dollars since 1986. In 2012 alone, recoveries under the False Claims Act reached a record level of $5 billion. Known as the qui tam statute, the False Claims Act allows whistleblowers to file their own private lawsuits on behalf of the government for fraud. If the case is successful, whistleblowers stand to recover between 10 and 30 percent of any final judgment or settlement recovered by the government.
Since fraud can often be extremely difficult to investigate and almost impossible for outsiders to detect, the information provided by whistleblowers in qui tam suits is crucial to discovering multiple types of fraud that would otherwise never be exposed. This is particularly true in the cases of Medicare and Medicaid fraud, as the programs rely primarily on the honesty and integrity of health care providers using a highly complex system of “current procedural terminology” codes to bill for their medical services.
The False Claims Act has undergone a series of changes over the years. For example, a 2009 amendment to the statute expands the protections against employer retaliation to all agents and contractors of the employer and also protects all individuals who make a lawful effort to put a stop to the fraud in violation of the False Claims Act. Additionally, the Dodd-Frank Wall Street Reform Bill and the Patient Protection and Affordable Care Act (“PPACA”) have also expanded the particular types of fraud that give rise to valid False Claims Act lawsuits.