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Texas Whistleblowers Shed Light on Hospice False Claims Leading to $12.2M Settlement

The U.S. Department of Justice announced that five hospice companies agreed to a $12.2 million settlement in whistleblower cases claiming kickbacks in exchange for referrals. The DOJ alleged the companies violated the federal False Claims Act by accepting illegal kickbacks in exchange for patient referrals and filing false claims to Medicare and Texas Medicaid. hospice care whistleblower false claims act

It's highly probable we'll continue seeing cases like this as health care costs soar and companies see opportunities to exploit and take in more taxpayer dollars. The National Health Care Anti-Fraud Association estimates financial losses due to health care fraud stretch into the tens of billions of every year - and is growing as our aging population is increasingly in need of more intensive health care services.

Last year, the DOJ reported it had recovered $4.7 billion in False Claims Act cases in fiscal year 2016, and of that, $2.5 billion came from the health care industry, including drug companies, medical device companies, nursing homes, hospitals, laboratories, doctors and hospice centers. These figures, though, reflect only the federal losses. In many cases, like the recent scheme in Texas, the agency was helping to recover additional losses from state Medicaid programs. Last year was the seventh in a row that health care fraud recoveries exceeded the $2 billion mark.

Other big recoveries came from the housing and mortgage industries, as well as programs intended to assist veterans, the elderly, low-income families and college students.

As our Houston whistleblower attorneys can explain, the False Claims Act has a provision to encourage those close to the organization to speak out and make these types of fraud public. It's called a qui tam action. This gives a private person or persons the opportunity to file a lawsuit for violations of the False Claims Act on behalf of the government. The person bringing the action in this case would not be the "plaintiff," but rather the "relator."

Qui tam actions must be:

  • Filed under court seal;
  • Contain a complaint/ written disclosure of all relevant information known to the relator;
  • Served to the U.S. Attorney for the judicial district where the qui tam was filed and also on the Attorney General of the U.S.

What is At Stake?

In cases where government intervenes and decides to prosecute the case, the relator will be entitled to receive between 15 and 25 percent of the amount recovered by the government. If, however, the government decides not to intervene, the relator's share (if he/ she wins) spikes to between 25 and 30 percent. There are some some circumstances wherein relator's share would be slashed to just 10 percent, but that usually involves cases where relator planned/ initiated the fraud. If the case is successful, relator will also be entitled to coverage of legal fees and other expenses arising from the action.

Those convicted of criminal conduct can't file qui tam actions. There is also the "first to file bar," meaning if someone else has already filed the claim, you can't subsequently step in and file your own separate action. This is why it's important to contact an experienced qui tam attorney in Houston who can explain your rights and responsibilities as a whistleblower.