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Managed Care Insurance Fraud: Medicare and Medicaid Kickbacks

Illegal kickbacks in managed care insurance are costly schemes that corrupt the healthcare system. When dishonest managed care organizations (MCOs) devise unlawful kickback schemes to defraud government healthcare programs, physicians base their decisions on financial gain rather than the medical needs of their patients. It’s a dangerous crime that undermines the ethics of our medical community and puts patients at risk. To help spread awareness about the severity and wastefulness of illegal Medicare and Medicaid kickbacks, let’s take a look at a recent case in which whistleblowers helped bring fraud to light.

Humana and Roche Settle False Claims Act Lawsuit for $12.5 Million

In February of 2021, pharmaceutical company Roche and Medicare Advantage insurer Humana agreed to pay $12.5 million to the U.S. government to resolve whistleblower allegations that the companies violated the anti-kickback statute. 

The case originated in 2014 when a former employee at Roche Diagnostics exposed an alleged scheme that involved Humana and Roche submitting false claims through Humana’s Medicare Advantage program.

Medicare Advantage, also known as Part C of the Medicare program, is a managed care model where the government pays private insurance companies, like Humana, premiums to insure Medicare beneficiaries. The plans are paid a capitated, or per-person, amount to provide benefits to beneficiaries who enroll in one of their plans. Payments to plans are based on demographic information and the health status of each plan beneficiary. In general, plans receive larger payments for beneficiaries with more severe diagnoses.

The whistleblower in this case, Crystal Derrick, was an account manager for Roche’s diabetes testing products. Derrick alleged Humana and Roche entered into a kickback arrangement in which Roche forgave Humana’s debts in exchange for Humana purchasing Roche products and favoring those products when selecting them for Medicare Advantage plans. Derrick alleged this arrangement was a violation of the anti-kickback statute. Under this statute, it’s a crime to “knowingly and willfully offer, pay, solicit, or receive any remuneration directly or indirectly to induce or reward patient referrals or the generation of business involving any item or service reimbursable by a Federal health care program.” 

Although the government ultimately decided not to intervene, Derrick’s case was filed under the qui tam, or whistleblower, provision, which allows any individual or non-governmental organization to file a lawsuit on behalf of the United States government. Under this provision, whistleblowers can earn a reward for exposing fraud that results in a financial loss to the federal government. As a result, Derrick is set to receive a whistleblower reward of just over $3.6 million.

Blowing the Whistle on Managed Care Insurance Fraud

Exposing wrongdoing is the best way to combat the corruption that negatively affects the greater good. Derrick’s case is a prime example of the powerful role whistleblowers play in the fight against fraud.

Our goal at DJO is to expose managed care fraud wherever and whenever possible. We work with individuals to gain information, build a case, and fight for taxpayers’ justice. In doing so, we can protect the vulnerable and make the world a safer place.

If you suspect fraud in your organization, please contact us. DJO is comprised of a highly experienced team of whistleblower experts, lawyers, and even former whistleblowers, who strive to deliver the highest monetary reward for brave individuals who have valuable information that can expose fraud. If a whistleblower’s lawsuit is successful, the reward can be up to 25% of the funds recovered. The False Claims Act also offers whistleblowers protection against job retaliation or wrongful termination.

Do you have valuable information that can help bring fraud to light? Speak to our experts today.

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Reporting Managed Care Fraud: How Much Information Is Enough Information for a Case?

Managed care insurance fraud is an unfortunate reality that affects taxpayers, the government, and the millions of individuals enrolled in government-funded health plans. It’s a costly crime that steals at least $308.6 billion from American consumers every year. We must all work together to put a stop to schemes like upcoding and phantom billing by reporting fraud wherever and whenever possible. If you suspect managed care insurance fraud, here’s what you need to know about reporting your allegations and the information you need to support your case.

What Kind of Evidence Do I Need?

When coming forward with information about fraud, individuals want to be assured that they are receiving the highest possible reward for the information they are providing. How can one ensure that their information is applicable?

Some factors for ensuring your information is applicable include how extensive and detailed the information is about the reported fraud, whether the fraud involved a serious safety issue and the quality of the assistance the whistleblower and lawyers provide to the case. It is important to note that an individual should not wait long to report fraud, as the case, and the potential reward will go to the person who first shared the information. While you don’t have to witness the fraud firsthand, you do need physical evidence to show that misconduct actually occurred. This can include:

  • Documented meetings
  • Phone conversations
  • Emails
  • Research
  • Marketing and sales materials
  • Patient-specific information
  • Billing records
  • Test results

Documentation of fraudulent activities is important when bringing a potential case. The more information and documentation you have, the stronger your case will be. Let’s take a look at a case in which a whistleblower accused her former employer of knowingly submitting false health status information about beneficiaries to boost risk scores and drive up reimbursement.

Sutter Health and Affiliates to Pay $90 Million to Settle False Claims Act Allegations of Mischarging the Medicare Advantage Program

In August of 2021, the government announced a $90 million False Claims Act settlement with California-based healthcare services provider Sutter Health. The settlement stems from a whistleblower lawsuit filed by former Sutter employee, Kathleen Ormsby. After Ormsby was hired in 2013, she began comparing benefit codes with patient medical records and discovered high error rates suggesting Sutter was getting overcompensated for services by the government. When Ormsby notified her superiors, her audits were shut down, and Sutter continued their practices. In 2015, Ormsby reported the discrepancies and filed a whistleblower lawsuit under the False Claims Act. As the first complainant in the whistleblower lawsuit, Kathleen Ormsby is set to receive between 15% and 30% of the settlement.

Blowing the Whistle on Managed Care Insurance Fraud

The Sutter case is a prime example of the seriousness of managed care fraud and how powerful whistleblowers are in enacting change and demanding justice.

Our goal at DJO is to expose managed care fraud wherever and whenever possible. We work with individuals to gain information, build a case, and fight for taxpayers’ justice. In doing so, we can protect the vulnerable and make the world a safer place.

If you suspect fraud in your organization, please contact us. DJO is comprised of a highly experienced team of whistleblower experts, lawyers, and even former whistleblowers, who strive to deliver the highest monetary reward for brave individuals who have valuable information that can expose fraud. If a whistleblower’s lawsuit is successful, the reward can be up to 25% of the funds recovered. The False Claims Act also offers whistleblowers protection against job retaliation or wrongful termination.

Do you have valuable information that can help bring fraud to light? Speak to our experts today.