On January 30, the United States Attorney of the Eastern District of Kentucky, Carlton S. Shier IV, announced that Thoroughbred Diagnostics and Edgewater Recovery Center LLC agreed to settlements amounting to a combined $7.1 million, resolving claims brought under the qui tam provisions of the False Claims Act (FCA). A qui tam whistleblower prompted the case, alleging that the drug rehabilitation facility, Edgewater Recovery Center LLP, had falsely submitted services to defraud healthcare programs.
The qui tam provisions incentivizes private citizens to bring a civil lawsuit on behalf of the U.S. by rewarding 15-30% of the settlement from government sanctions. More than $7.3 billion in whistleblower rewards has been paid out under the FCA since 1986. Whistleblowers are vital in qui tam cases, preventing and enforcing fraudulent activities.
The clinical laboratory, Thoroughbred, conducted urine tests solicited by the rehabilitation center, Edgewater. The government alleges that both businesses were falsely billing Medicare and Kentucky Medicaid, receiving significant monetary gain for patients’ urine tests that were not essential to diagnose or provide treatment.
“Thoroughbred performed the urine drug tests requested by Edgewater and billed them to Medicare and Kentucky Medicaid, despite knowing the tests were not typically used for patients’ medical diagnosis or treatment,” the government claims. “Thoroughbred billed for urine drug screens – a less complex test – performed on Edgewater specimens without a proper medical order requesting the test. As a result, Thoroughbred improperly received substantial payments from Medicare and Kentucky Medicaid.”
Shier stated: “When the valuable and limited resources of these programs are depleted by fraud, waste, or abuse, it has a profound impact on us all. We simply must prioritize taking the steps available to us to prevent inappropriate billing like this and to return the funds to their proper purpose – providing necessary medical care.”
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”
Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reforms. National Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act
