Articles Posted in False Claims Act: Recoveries

A couple of months ago, the Department of Justice announced a settlement with VMware, Inc. and Carahsoft Technology. The two companies specialize in providing virtualization software and information technology products to federal, state and local governments. The allegation against these two entities was that they did not provide their “best price” to the United States General Services Administration (GSA).
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The Department of Justice announced a settlement with nearly 500 hospitals related to the implantation of cardioverter defibrillators (ICD’s). The surgeries did not meet the appropriate medical conditions for Medicare coverage established in the National Coverage Determination (NCD). Medicare will generally exclude coverage for ICD procedures when a bypass or angioplasty has been performed within the last 90 days or within 40 days of a heart attack.
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Over the past couple of weeks, the Federal Courts have passed on a spate of fraud allegations against hospitals. In the past, New Jersey hospitals have been hit with similar claims and, in fact, some New Jersey hospitals have settled with the Federal Government for these allegations of fraud. The claims allege what amounts to improper or inflated billing practices. The terms of art for inflated billing is “upcoding”. Upcoding is basically where the hospital bills for a procedure which may have been more intricate and provides for a larger reimbursement from the Federal Government. The “upcoding” refers to a different billing “code” that the Federal Government assigns to certain procedures. By submitting a claim for a more difficult or intricate procedure, the hospital is reimbursed a larger amount of money. Although there are variants on this upcoding issue, a qualified fraud attorney can explain the intricacies.

“Upcoding” can occur in hospitals as well as physician’s offices, nursing homes or, for that matter, dental offices and counselors’ offices. The upcoding can come in the form of billing for a more difficult procedure but it can also come in the form of billing for a longer procedure. For example, a false claim was brought against a counselor for billing for one-hour sessions when in fact the sessions were only lasting 45 minutes. After the fraud was reported, the investigators engaged in some simple math. The accumulation of the hours billed by the professional far exceeded that which was possible.

As a New Jersey Whistleblower Attorney I am truly amazing how long whistleblower cases can take! This is best exemplified by the recent IRS announcement of their FIRST award. The time lapse is interesting because the IRS established a whistleblower office in 2006. Nearly five years later, the IRS announces its first award to a whistleblower.

The facts are fairly interesting in that the whistleblower was actually an accountant. The accountant reported the underpayment of in excess of $20 million in taxes and interests from a financial services firm. At the time of the report, the accountant was working for the company he reported.

The “new” IRS program announced in 2006 was designed to encourage tips in larger cases and the awards to the person supplying the information can vary between 15% and 30% of the amount of money recovered by the IRS. The IRS awarded the whistleblower 22% of the taxes recovered.

A telecommunications company paid $16.5 Million for improper billing practices. Avaya, a New Jersey-based company, billed governmental agencies for telephone equipment that either didn’t work or had been replaced. A concerned individual brought the improper conduct to light. Under the Federal Whistleblower Statute, the individual will be paid for providing the information. Although it has yet to be announced, the amount paid to the person disclosing the information will exceed $ 3 million. If you know of improper billing practices like this, call us.

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