Blowing the Whistle on Technology Fraud in the Healthcare Industry
By Joseph Gentile, Esq.
Joseph Gentile, JD, Esq. is a partner with Sarraf Gentile LLP of Great Neck, NY.
The healthcare industry has always been an area susceptible to fraud. In fact, government investigators estimate that in 2016, about $95 billion was improperly paid out by Medicare and Medicaid. That’s only a single year’s amount of fraud in just two of the government’s many healthcare programs.
With an aging population, increased healthcare spending, the passage of the CARES Act, and the government’s multi-trillion dollar effort to mitigate the health and economic effects of the COVID-19 pandemic, fraud in the healthcare industry will only increase. With social distancing become the new normal, the use of technology to deliver healthcare services will also increase. Fraud in this area will, therefore, likely increase.
As a result, the need for insiders to blow the whistle on technology fraud in the healthcare industry is more important than ever. Whistleblowers help ensure that these precious government dollars go towards stopping the harmful effects of the virus and shoring up our economy—and not to line the pockets of opportunists.
The best tool for combating this scourge is the False Claims Act (FCA), a Civil War-era law that was passed to address the fraudulent sale of decrepit horses, ill mules, and faulty rifles to the Union Army (which not only stole tax dollars, but endangered soldier’s lives). The FCA has since been expanded to cover most government dollars, including healthcare spending such as Medicare, Medicaid, and Tricare.
The FCA has been regularly used to fight technology fraud in the healthcare industry. Just last year, the Department of Justice announced a $57.25 million settlement against Greenway Health LLC (Greenway), a Tampa, Florida-based developer of electronic health records (EHR) software for causing its users to submit false claims to the government by misrepresenting the capabilities of its EHR product Prime Suite and providing unlawful remuneration to users to induce them to recommend Prime Suite.
The US Attorneys whose offices prosecuted the fraud said it best. According to Christina E. Nolan of the District of Vermont, “These cases are important, not only to prevent theft of taxpayer dollars, but to ensure that the promise of health technology is realized in the form of improved patient safety and efficient healthcare information flow.” According to Byung J. “BJay” Pak of the Northern District of Georgia, “Medical professionals and patients depend on the security and competency of electronic health records as a means to improving both the quality and coordination of health care services… Vendors who falsify the viability of their products erode the integrity of public health systems and will be held accountable for their misrepresentations.”
Cases like Greenway are just the tip of the healthcare fraud iceberg. Indeed, the FCA has been used to recover billions in healthcare fraud and was most recently used in the government’s historic $1.4 billion recovery from Reckitt Benckiser Group involving the marketing of Reckitt’s opioid addiction treatment drug Suboxone. Whistleblowers were awarded over $100 million.
While blowing the whistle may not be easy, the FCA encourages it by offering anti-retaliation protections for those who out the fraud as well as lucrative financial rewards. Where the government obtains a recovery as a result of fraud, the whistleblowers are generally awarded between 15% and 30% of the recovery. Because many FCA healthcare cases are large by nature, the FCA’s financial rewards to whistleblowers have been historically large as well.
Our healthcare industry is being tested like never before, and the people in it — especially those who are working to use technology to improve its delivery and accuracy — play a critical part in ensuring its effectiveness, now more than ever. Those same people can help ensure that the billions of dollars being spent on healthcare aren’t being wasted by fraud. Every dollar counts. Pplicing that is not only a civic responsibility, but legally protected conduct that can result in significant economic awards.