Hospital fraud is a significant issue in today’s healthcare system. At Jeff Newman Law, we specialize in representing healthcare whistleblowers, including those that expose fraudulent activities and practices within hospital settings.
In this article, we’ll provide an overview of common types of hospital fraud and explain the crucial role whistleblowers play in fighting this pervasive issue.
The impact of hospital fraud
Fraud in the healthcare system is a serious issue that leads to many forms of far-ranging negative impacts.
Hospital fraud specifically drains government resources and wastes taxpayer money. It can even compromise the quality of care that patients receive, such as when medically unnecessary or more expensive treatments are rendered with profit motives in mind. (The 2022 hospital fraud settlement referenced below is just one such example).
Thus, whether it’s wasting taxpayers’ money or improperly influencing the treatments and services delivered, hospital fraud leads to various negative consequences that are felt throughout the nation’s health care system.
Forms of hospital fraud
Hospital fraud can manifest in various ways, but some of the most common forms include:
- Upcoding: This type of medical billing fraud occurs when a hospital bills for more expensive treatments than they actually provided to receive higher reimbursement from insurance companies or government programs.
- Kickbacks: This involves offering financial incentives to physicians or other healthcare providers to induce them to refer patients to their hospitals for expensive procedures.
- Unbundling: This form of healthcare fraud involves billing multiple services separately instead of as a single bundled service, leading to submitting multiple claims for the same treatment and, therefore, higher reimbursement amounts for the hospital.
- Billing for treatment or services not actually rendered: Hospitals sometimes add charges to a patient’s bill for services that were never provided. These so-called “phantom” charges can be difficult for patients to detect, especially if they are unfamiliar with medical billing practices.
- Billing for treatments or services that were not medically necessary: Not only does billing for medically unnecessary treatments result in false claims and monetary loss, but it can also negatively impact patient outcomes when they are subjected to treatments they did not need.
The vital role of whistleblowers
Whistleblowers play a critical role in the health care system by combating hospital fraud by bringing these fraudulent practices to light. By exposing healthcare fraud within hospitals, whistleblowers help protect patients from substandard care, save government resources and taxpayer dollars, and maintain public trust in healthcare institutions.
Indeed, whistleblower actions under the federal False Claims Act led to $1.7 billion in settlements and judgments for healthcare-related issues and violations in 2022 alone, including fraud committed in hospitals. The federal government recovers billions of dollars each year but relies on whistleblowers to alert it to fraud, waste, and abuse within the healthcare system.
Our firm of whistleblower attorneys is dedicated to representing the courageous individuals who help expose hospital fraud and helping them navigate the complex legal process. We understand the challenges associated with reporting hospital fraud and are committed to protecting our clients’ rights and interests every step of the way.
Examples of hospital fraud whistleblower cases
Examples of whistleblower cases that have exposed hospital fraud include the following:
- In 2022, a health care and hospital system operating in seven states paid $22.7 million to resolve allegations that it billed Medicare, Medicaid, and other federal health care programs for medically unnecessary surgeries. As part of the settlement, the hospital system acknowledged that employees had voiced concerns that two surgeons were endangering patients, including by performing surgery on patients who were not appropriate candidates for surgery.
- In 2021, a Florida hospital paid $22 million to resolve allegations that it violated the False Claims Act by, among other things, ordering unnecessary lab tests and converting multiple private physician offices to hospital facilities, and then seeking payment at higher rates without providing beneficiaries the required notice.
- In 2020, a West Virginia hospital paid $50 million to resolve allegations that the hospital violated the Stark Law and Anti-Kickback Statute by hiring doctors as employees and paying them more than their services were worth in order to capture referrals those doctors made that could be billed to government healthcare programs such as Medicare.
- In 2018, a Florida hospital chain, Health Management Associates, paid $260 million to resolve criminal and civil charges that it billed government healthcare programs for inpatient services that should have been billed as outpatient or observation services, paid illegal kickbacks to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.
Who Can Become a Hospital Fraud Whistleblower
Whistleblowers come from various backgrounds and roles within the healthcare industry. Anyone with knowledge of fraudulent activities or practices could become a hospital fraud whistleblower.
Healthcare Professionals and Employees
Healthcare professionals, including doctors, nurses, pharmacists, administrative staff, and other individuals, are often in the best position to identify health care fraud taking place within hospitals. Employees have firsthand knowledge of medical billing codes, procedures, patient care, and the inner workings of healthcare facilities.
Patients and Family Members
Patients and their families can also become whistleblowers if they notice discrepancies in billing statements, suspect unnecessary treatments, or identify other instances of healthcare fraud. By reviewing medical bills and asking questions about the services provided, patients and their families can help identify hospital billing fraud.
Contractors and Vendors
Companies and individuals that provide goods or services to hospitals may also become whistleblowers if they become aware of fraudulent practices. These contractors and vendors can include medical equipment suppliers, pharmaceutical companies, or other service providers working with hospitals.
Potential Rewards for Healthcare Whistleblowers
Whistleblowers who report hospital fraud and help the government recover funds lost to these fraudulent activities can be eligible for significant financial rewards.
Under the federal False Claims Act, whistleblowers may receive a portion of the recovered funds as a reward for their efforts. The percentage awarded typically ranges from 15% to 30% of the total amount recovered, plus legal fees and other costs.
As mentioned, whistleblowers play a vital role in the government’s efforts to stop fraudulent activities and recover government funds, which ultimately derive from taxpayer contributions. These whistleblower rewards thus help serve as an incentive for whistleblowers to come forward and report fraudulent activities, helping protect taxpayer funds and hospital patients alike.
By working with an experienced whistleblower law firm like Jeff Newman Law, healthcare whistleblowers can maximize their potential rewards while ensuring that their rights are protected throughout the process.
How our law firm supports whistleblowers
As a potential whistleblower, you may have questions about the legal process involved in reporting fraud or concerns about retaliation for doing so.
Our experienced whistleblower attorneys are here to provide comprehensive support and guidance throughout the process, including with:
- Confidential consultations: We offer confidential consultations to discuss your concerns and evaluate your case.
- Building a strong case: Our whistleblower attorneys have extensive experience in gathering evidence, working with experts, and building strong cases to expose healthcare fraud within hospitals.
- Navigating the complex legal process: We guide our clients through the complexities of the legal process, including filing complaints with relevant government agencies, cooperating with investigations, and pursuing legal remedies under the False Claims Act or other applicable laws.
- Whistleblower protections: We work diligently to ensure that whistleblowers are protected from retaliation. An experienced attorney will advocate for your rights and hold those who retaliate against you accountable.
- Maximizing financial rewards: Our attorneys are skilled at maximizing whistleblower rewards for our clients, ensuring that their courage and commitment to fighting fraud are fairly compensated.
- Ongoing support and communication: Throughout the whistleblower process, our team maintains open communication with our clients, keeping them informed and involved in each step.
Contact us for a free confidential assessment of whether you might have a potential healthcare fraud lawsuit that could result in a whistleblower award:
- Contact us for a free confidential consultation
- Call us at (617) 415-4891