A federal judge in Houston says that a Medicare fraud case against a Texas eye clinic can proceed. Outreach Diagnostic Clinic unsuccessfully argued that the government didn’t have enough facts to allow the case to proceed.
Like most Medicare fraud prosecutions, this case started when a concerned worker blew the whistle. Michael Sorensen was an optometrist at the clinic. He worked there from July 2002 through June 2012. In 2010 he was directed by the clinic’s medical director to bill tonometry tests as if they were a tonography. The tests sound similar but Medicare reimburses more for tonography. The latter also requires more specialized equipment and training.
Sorensen balked. He told his boss that he wouldn’t bill for a test that wasn’t performed. Later he would discover that all the clinic’s technicians were billing tonometry tests as the more expensive tonography. Once again, he raised his concerns to management.
Sorensen was especially concerned because the clinic didn’t even have the equipment to perform the expensive tests.
Like most whistleblowers, Sorensen tried multiple times to correct the problem internally. Only when he was ignored did Sorensen quit. He decided to leave rather than falsify and sign off on false Medicare bills. Sorensen then became a whistleblower.
By the time he filed his False Claims Act lawsuit, however, Sorensen no longer had access to patient records. We encounter this situation daily. Whistleblowers often know that fraud is occurring but once they quit or are fired, they don’t have access to the “who, what, when and where.”
Outreach Diagnostic Clinic sought to dismiss the case. The clinic claimed the case shouldn’t go forward because Sorensen didn’t have enough details. Fortunately, the court disagreed.
Judge Hughes said, “While this claim for fraud has a heightened pleading standard, it is not so high as to require the government to prove its case as it would at trial. Sorensen describes his observations of a scheme to submit false claims to the government, the time frame in which he observed it, each defendant’s role in the scheme, and the code that was used to send the false claims to Medicare. He is not required to name a specific false claim and the date on which it was sent… The government describes a scheme, when it was done, who participated in it, and how they tried to cover their tracks.”
Since Sorensen first filed his whistleblower lawsuit in 2012, the government intervened and is now prosecuting the claim. The Justice Department says Outreach Diagnostic Clinic submitted more than 14,450 claims for services never performed.
Medicare says the value of those tests is $807,000. The amount Outreach and its clinics may have to pay, however, is much higher. Under the False Claims Act, the court can award triple damages and impose fines of up to $11,000 per claim. That means the potential penalty is a staggering $159 million. We doubt that Outreach could ever afford such an amount. The takeaway, however, is that Medicare fraud penalties can quickly mount.
Medicare Fraud Whistleblower Awards
Under the False Claims Act, insiders with information about fraud against the government or involving federal funds can receive an award of up to 30% of what the government collects. To qualify for an award, you must be an original source of the information and generally be the first to file. That means 2nd hand information and media reports don’t qualify. Waiting too long can be fatal too.
To get the award, you must file a sealed lawsuit in federal court. While under seal, the case remains secret giving prosecutors the ability to investigate. Ultimately, the justice department can either take over the case or allow the whistleblower’s own lawyer to prosecute.
MahanyLaw – America’s Whistleblower Lawyers
When choosing a whistleblower lawyer for your case, always ask questions. At a minimum, ask about his or her experience handling whistleblower cases, if they will continue to represent you should you face retaliation and if he or she has ever prosecuted a case declined by prosecutors.
Our whistleblower lawyers have helped our clients receive over $100 million in whistleblower awards. We are not afraid to take on the largest and most powerful banks and corporations, even if the Justice Department declines the case. If you face retaliation, we have a dedicated, experienced employment lawyer to assist in enforcing the False Claims Act’s robust whistleblower protection provisions.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept confidential.
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MahanyLaw – America’s Medicaid and Medicare Fraud Lawyers