Clinics and medical care providers are not permitted to pay kickbacks for referrals. There are strict limitations on any type of financial relationships between healthcare providers and sources of referrals in order to protect the integrity of the medical care process. If doctors are paid money for recommending a particular clinic or pushing patients towards a particular treatment, this could create perverse incentives for the doctor to put his financial interests above providing the very best patient care.
Despite the rules, some clinics and care providers skirt the law. Because the involved doctors and clinics can mutually benefit from lawbreaking, illegal kickback arrangements and unlawful referral bonuses can happen in secret and it can be difficult for law enforcement or outside investigators to identify problem behavior and take action.
The False Claims Act is one of the most powerful tools used to help governments recover improperly-paid funds when illegal kickbacks are influencing medical decisions.
False Claims Act Leads to Large Payout
Under the False Claims Act, it is possible for private citizens to file lawsuits on behalf of the government being defrauded by medical care providers. The private citizens, who are referred to as whistleblowers in many cases, can be rewarded for coming forward by receiving a portion of the money obtained for the government through the lawsuit.
The News Leader recently reported on one case in which False Claims Act violations led to a large payout to a whistleblower and the government. The case involved Mercy Springfield Communities and its Clinic System.
A pediatrician employed by Mercy came forward to report the clinic system was submitting false claims to Medicare for services that had been provided to patients who were referred by physicians given bonuses for referrals. The bonus structure was reported to be violating anti-kickback laws by rewarding physicians for the value of the patient referrals they provided.
Mercy Springfield Communities and its associated clinics settled the allegations it was facing by agreeing to pay $5.5 million back to the federal government. No wrongdoing was admitted, and a statement released by the healthcare provider indicated the case centered around a highly technical area of law, with no patients improperly billed.
The pediatrician who came forward and filed the False Claims Act is entitled to receive $825,000 based on provisions of the law entitling whistleblowers to a percentage of money the government is able to recover in fraud cases. The settlement ensures taxpayer funds are returned to Medicare that were paid out in connection with violations of the law, and it also helps to deter future wrongdoing on the part of healthcare providers.
Patients suffer when care providers are motivated by money, rather than by good medicine. The cases by whistleblowers to stop abuses within the medical care field are some of the most important types of claims brought under the False Claims Act because both money and lives could be saved. Anyone who is aware of illegal kickbacks or other unethical or inappropriate behaviors going on with medical care providers should come forward with a claim.