The federal False Claims Act has been used to successfully recover billions of dollars from fraud against Medicare and Medicaid for decades. However, a Department of Justice-led task force recently charged that two health information management companies were involved in a scheme to “upcode” medical records to obtain more money for services performed. As a result, a Manatt, Phelps & Phillips attorney says it will be interesting to see how this case unfolds.
“This investigation is part of the DOJ’s focus on combating Medicaid and Medicare fraud,” said John LeBlanc of Manatt, Phelps & Phillips. “The DOJ has been very successful over the past three years in putting together these large task forces that are focused on fraud against government healthcare programs.”
The False Claims Act is a federal law designed to prevent fraud against the United States, including Medicare and Medicaid. The act allows private citizens with knowledge of fraud against the government to bring suit and share in any recovery. The federal government then has the option to join or pursue its own action against the defendant.
“The DOJ uses this law frequently,” said LeBlanc, who serves as chair of Manatt’s False Claims Act Task Force and focuses on health care fraud at the firm. “I have been involved in several FCA cases against major health care providers, with the government joining in on most of those cases.
LeBlanc added that federal agents are working to combat fraud through increased cooperation between various state authorities under this new task force. He said it would be interesting to see how this case unfolds because of the investigation’s multi-state nature.
“The task force is working with multiple states, and they’ll be sharing information, which will likely lead to more cases through multi-district litigation,” LeBlanc said.
“It’s an important tool for the government because it allows them to develop a body of evidence against defendants without having to go through the traditional prosecution process.”
LeBlanc went on to say that the government has had to rely on whistleblowers to stop this type of fraud.
“The other thing that’s unique about these cases is that the DOJ uses information from whistleblowers to assist in their investigations,” LeBlanc said. “This allows them to jump-start what can be a complicated investigation.”
He added it would be interesting to see how the case unfolds due to the investigation’s multi-state nature.
“The task force is working with multiple states, and they’ll be sharing information, which will likely lead to more cases through multi-district litigation,” LeBlanc said. “It’s an important tool for the government because it allows them to develop a body of evidence against defendants without having to go through the traditional prosecution process.”
The U.S. government has recovered 2.7 billion since 1986 through cases involving fraud against Medicare and Medicaid, according to LeBlanc. “As with most statutes like this, the majority of the settlements that are involved in these matters are confidential,” he said. “The public will never find out about the settlements that occur until they’re announced by the DOJ or a state attorney general.”
LeBlanc concludes that when the federal budget is under pressure, fraud against Medicare and Medicaid is going to become a bigger deal.
“When there’s financial pressure, that’s when you typically see more enforcement activity,” he said. “That will likely happen with these healthcare fraud cases where the government uses all its tools to ensure accountability.”