Company must pay $2.6M after allegations brought by whistleblower

Healthcare fraud costs an already overburdened medical system far too much. Whistleblowers, though, can play an important role in reducing wasteful spending and other consequences of illegal acts. A recent case demonstrates how.

False claims

Thanks to a whistleblower, Acting U.S. Attorney Nathaniel R. Mendell’s office recently announced that the Massachusetts Eye and Ear Infirmary Inc. agreed to pay nearly $2.7 million in response to allegations that it had violated the False Claims Act. Between Jan. 1, 2012, and Feb. 1, 2020, Massachusetts Eye and Ear, which has inpatient and outpatient facilities in Boston, Foxborough, and Plainville, submitted billing claims for office visits not allowed under federal law. The allegations covered claims to both Medicare and MassHealth, the Massachusetts Medicaid program.

Massachusetts Eye and Ear doctors performed nasal endoscopies and laryngoscopies over the eight-year period, according to prosecutors. Neither Medicare nor MassHealth permits billing for the office visits or the procedures, they said, except under special circumstances. Massachusetts Eye and Ear agreed to pay $2.678 million to settle the case.

The allegations first came to light in a lawsuit filed by a whistleblower under the False Claims Act. As a result of the resolution of the case, the whistleblower – also known as a “relator” under the act – is entitled to receive 15% of the recovered money. For the Massachusetts Eye and Ear whistleblower, that means $390,000.

Real consequences

Mendell, the acting U.S. attorney, pointed out that healthcare fraud is damaging in at least two ways. First, organizations guilty of fraud illegally enrich themselves with taxpayer funds. Secondly, also as a result of the activity, less money is available for legitimate patient care.

“This settlement punishes bad billing and helps safeguard government health care programs from fraud, waste and abuse,” Mendell said in a statement.

Officials said the key to the case was the involvement of an unidentified whistleblower. Under the False Claims Act, people are allowed to file lawsuits on behalf of the U.S. government.

In another news release, FBI Special Agent in Charge for the Boston Division Joseph R. Bonavolonta praised the whistleblower: “We would like to thank the patient who had the courage to come forward with allegations of illegal conduct, and we’d like to encourage others to do the same because standing up for what’s right and safeguarding taxpayer dollars is critical, given that every year, the submission of false claims to the government costs taxpayers billions.”

A Massachusetts Eye and Ear spokesman said infirmary executives “have taken corrective actions to address our billing procedures.”