Last year, Vanguard Health Systems settled Medicare fraud charges related to its former ownership of the Arizona Heart Institute. Vanguard operated hospitals in several states before being acquired by Tenet Healthcare Corporation. Neither company is a stranger to the federal False Claims Act and Medicare fraud charges. We now believe that Vanguard was committing similar misconduct in several Detroit area hospitals.
Kickback Law and the Federal Anti-Kickback Statute
According to court records, Vanguard submitted false claims to the Medicare program by deliberately paying some physicians above fair market value salaries. Vanguard did so as a way of rewarding those doctors who admitted more Medicare patients. Paying above market salaries or bonuses is considered a kickback. A federal law called the Anti-Kickback Statute prohibits giving anything of value in order to influence healthcare decisions.
Congress wants medical decisions to be based on medical necessity, not on who pays bribes or kickbacks. In the Arizona Heart Institute case, Medicare was worried that some patients were being needlessly hospitalized or kept in the hospital solely so the doctor could receive a bonus or higher salary. (Vanguard was permitted to settle the charges without admitting any wrongdoing.)
Vanguard also settled allegations that its physicians had upcoded Medicare billings for certain patient visits in order to obtain larger payments than allowable for the services actually provided. Upcoding is a common method of Medicare fraud. As an example, we are aware of cases in which healthcare workers are pressured to modify a diagnosis or say that additional tests were necessary even though they were not.
A good way to think about upcoding is to think about the difference between a common cold and pneumonia. The time necessary for a physician to evaluate and manage a cold is much shorter. Therefore, the amount reimbursed by Medicare for treatment of colds is less than if a patient has pneumonia. Upcoding occurs when the hospital says the patient with a head cold was treated for pneumonia.
Another upcoding example is the auto mechanic who says you need an entire new transmission when all that is needed is a minor adjustment.
Vanguard also settled charges that one of its cardiac physicians was not properly supervising therapists. Certain treatments and tests require a physician be present while the procedure or test is performed. If the physician isn’t present, however, Medicare won’t pay for the service. More importantly, these situations may also jeopardize patient safety.
We have reason to believe that Medicare fraud was or is taking place in the Vanguard facilities located in the metropolitan Detroit area. As part of our investigation, we are looking to speak with people who worked at these facilities and are familiar with billing, coding and patient care protocols.
Government Pays Whistleblower $500,000 Award
The Arizona Heart Hospital case was brought under the federal False Claims Act. Under the Act, whistleblowers can receive a portion of whatever the government collects from the wrongdoer. In this case, a healthcare management professional, Jacque Lee, was responsible for filing the complaint and blowing the whistle. Her case settled in June of 2015 for $2.9 million. For her efforts in blowing the whistle, Lee received over $500,000.
The case is somewhat interesting in that Lee only worked with Vanguard’s Arizona facilities for just 9 weeks. With 27 years of experience, however, she knew how to spot fraud.
Like most whistleblowers, Lee first brought her concerns to management’s attention. Only after she ignored did she seek counsel and file a complaint.
False Claims Act and Whistleblower Awards
Kickbacks, upcoding, billing for services not performed, billing for services that are not medically necessary and improperly performed / supervised services can all be violations of the False Claims Act and eligible for an award.
Unlike Arizona, Michigan also has a state Medicaid fraud law meaning it is often possible to receive two awards in Michigan, one for Medicare and one for Medicaid.
To qualify for an award, one must have inside information of the fraud or kickbacks. Generally, you also must be the first to file.
To qualify for a percentage award, you must file a sealed complaint in federal court. That isn’t as scary as it sounds; we can investigate the case and file a lawsuit on your behalf. There is never a fee unless we recover money for you. If we don’t win, you don’t pay.
Once the suit is filed, the government investigates the claims and decides whether it wishes to pass, take over the case or ask the court to dismiss. If the government takes over, the award is generally 15% to 25% of whatever the government recovers. If the government declines and we prosecute, the award can be as much as 30%.
Some healthcare workers report their concerns directly to Medicare. There is nothing wrong with doing so but absent the filing of a sealed lawsuit, the award won’t exceed $1000. If you want a large award, contact us before contacting Medicare.
Need more information? Contact attorney Brian Mahany at or by telephone at (313) 879-2070. You can also visit our Michigan Medicaid fraud and Medicare fraud information pages. All inquiries are protected by the attorney – client privilege and kept completely confidential.
MahanyLaw – America’s Medicare Fraud Lawyers
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