For several years, the largest bulk of recoveries under the False Claims Act have been for actions challenging Medicare/Medicaid fraud. Several billion dollars have been recovered in just the past five years against leading pharmaceutical companies, device manufacturers, and various medical providers for ever-inventive schemes of fraud.
Fraud on the multi-billion dollar Medicare and Medicaid programs comes in a variety of forms. These are some of the most common:
Pharmaceutical/Medical Device Fraud (Including Off-Label Promotion)
Pharmaceutical companies and medical device makers, large and small, are routinely prosecuted under the False Claims Act for various forms of off-label marketing (marketing and promotion for uses not approved by the FDA), unlawful kickbacks to medical providers, and related improper practices. Medicare/Medicaid will not pay for every use of every product and these companies routinely cause the submission of false claims for payment by their unlawful conduct.
Billing Fraud and Lack of Medical Necessity
Medical providers who bill for services never provided or bill at a higher level than the actual services provided are liable under the False Claims Act. This is also true for providers who bill for services where the treatment (whether provided or not) is not medically necessary for treatment of a patient’s condition.
Violations of the federal Anti-Kickback Statute constitute violations of the False Claims Act. Often medical companies or others provide financial rewards to persons who utilize or promote their products or send patients to utilize their products or services. These arrangements permeate the health care industry and are often unlawful. The Stark Law prohibits the referral of Medicare patients for designated health services to an entity with which the physical referring has a financial relationship, absent a safe harbor. Violation of this law also violates the False Claims Act.
False Statements and Certifications to Health Care Programs
Medical providers and others in the health care industry are regularly required to submit statements and certifications attesting to their compliance with various federal and state health care regulations. When those statements and certifications of compliance are false, and those false statements or certifications are material to payment by the government health care program, a violation of the False Claims Act is often found.
Hospital and Other Medical Provider Fraud
Hospitals, hospice centers, outpatient facilities and other health care providers are required to submit cost reports and other documents in order to be eligible for receipt of Medicare/Medicaid funds. Falsification of those documents and false statements in support of these submitted materials often provide the basis for False Claim Act liability.
Pricing and Reporting Fraud
Drug wholesalers and others in the health care and pharmaceutical industry often manipulate drug pricing and purchase arrangements in a manner that fraudulently causes Medicare/Medicaid to pay more for the cost of drugs and other medical treatments. These behaviors also create liability under the False Claims Act.