Medical waste disposal is a big business. The disposal of dirty needles, operating room dressings, hospital surgical gowns and the like is highly regulated and expensive. Medical waste can’t simply be tossed in a landfill.
Where does it go? That depends on the state and the type of debris but often it is incinerated at very high temperatures to prevent the spread of infectious diseases. Although the costs are often borne by hospitals and medical clinics, those costs get indirectly passed along to patients. For many patients, that means Medicare and Medicaid.
In 2008, an employee of Stericycle, a Chicago area medical waste company, filed a qui tam complaint alleging that the company was jacking up prices without proper authorization. The employee, Jennifer Perez, was a billing specialist assigned to handle government accounts.
Perez claimed that even though the contracts advertised they had locked in rates, Stericycle would add surcharges such that the rates would increase by 18% every 9 months. Prior to filing her qui tam complaint, she says she alerted management but her concerns fell on deaf ears. When she continued to warn that the company’s billing practices were illegal, she was fired.
Qui tam actions are lawsuits brought by whistleblowers under the federal False Claims Act. Dating back to the Civil War, a qui tam action lets an ordinary person with inside information about fraud file a lawsuit in the name of the government. If the government recovers money, the person bringing the suit is awarded a percentage of the recovery. Last year the federal government paid out over $635 million in qui tam awards.
To file a qui tam lawsuit, there must be a loss to a government program or funds. That is easy in most healthcare cases because Medicare is federally funded. About half the states have a similar qui tam law that covers Medicaid.
According to a media release in the Stericycle case, the company has agreed to pay $26,750,000.00 to settle the case. Much of that money will go to the federal government with 14 states and the District of Columbia getting the rest. In settling the case, the company was not required to admit any wrongdoing.
It is unknown how much Perez will receive for coming forward and filing the claim. Although the records have been unsealed, the settlement has not yet been docketed in the court’s files.
Contract procurement fraud hurts not only taxpayers but legitimate businesses too. When a company cheats the government, it is often difficult for honest businesses to compete. While the dishonest company boosts its profits and has more money to expand, honest operators must struggle.
Filing a qui tam lawsuit requires a lawyer and inside knowledge of fraud. Cases are filed under seal meaning they remain secret while the government investigates. Investigations can last months or years. Ultimately prosecutors must decide whether they wish to take over the suit or let the whistleblower’s own counsel prosecute in the government’s name. In rare instances the government can ask the court to dismiss the suit.
Whether the government intervenes or the whistleblower must do most of the work effects how much the whistleblower is paid. By statute, a federal qui tam plaintiff is entitled to between 15% and 30% of whatever the government collects.
We believe that whistleblowers are the new American heroes. They take direct action against fraud and often are paid millions of dollars for their efforts. Over the last 12 months our whistleblower clients have been paid over $100 million dollars.
Interested in filing a qui tam lawsuit? Give us a call. All inquiries are kept strictly confidential and protected by the attorney – client privilege. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).
MahanyLaw – America’ Whistleblower & Qui Tam Lawyers