Whistleblowers Key in Rooting Out Healthcare Fraud, Recent FCA Cases Show

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Two recent False Claims Act settlements that stemmed from qui tam (or whistleblower) lawsuits exemplify the importance of whistleblowers in protecting the defrauding of federal healthcare programs.

The qui tam provisions of the False Claims Act enables private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs. In Fiscal Year 2021, whistleblowers helped the U.S. Department of Justice (DOJ) recover $1.6 billion in settlements, and the press release highlighted health care fraud as “the leading source of the department’s False Claims Act settlements and judgments.” These two cases show how whistleblowers are key to protecting federal healthcare programs and, in turn, the patients who benefit from said programs.

OGCC Behavioral Services

On March 31, the DOJ announced that OGCC Behavioral Health Services, Inc. and Dionne Huffman, the company’s owner and Executive Director, will pay $750,000 to resolve allegations of violating the False Claims Act. “OGCC is a CORE Services Provider for the Georgia Department of Behavioral Health and Developmental Disabilities,” and CORE providers “are supposed to offer services to individuals who are experiencing emotional and behavioral difficulties, mental health problems, or addiction.”

The government alleges that between 2014 and 2016, “OGCC falsified the identity and qualifications of the health care providers to receive reimbursement at a higher rate, inflated the amount of time spent with patients, submitted claims for patient visits that never occurred, misrepresented dates of service, and fabricated documents in response to government scrutiny.”

According to the press release, the settlement resolves allegations in a lawsuit that Latashia Hawkins, a former OGCC employee, filed under the False Claims Act’s qui tam provisions.

“This settlement will serve to hold OGCC and Huffman accountable for stealing from Medicaid and the taxpayers of Georgia,” said Acting Special Agent in Charge Philip Wislar in the announcement. “These funds were intended to support citizens with mental health needs but were instead diverted to greedy fraudsters. The FBI encourages brave whistleblowers like Ms. Hawkins to continue to come forward to report such crimes to law enforcement.”

BayCare Health System and Four Hospitals

The DOJ announced on April 6 that BayCare Health System Inc., along with “entities that operate four affiliated Florida hospitals” (collectively, BayCare), will pay $20 million to resolve allegations that they violated the False Claims Act by engaging in a scheme to fund the state’s Medicaid payments. The whistleblower who filed a qui tam lawsuit in this case is Larry Bomar, who worked as a hospital reimbursement manager in Florida. Bomar will receive a $5 million whistleblower award.

The press release explains that Florida’s Medicaid program is “jointly funded by the federal and state governments.” According to federal law, “Florida’s share of Medicaid payments must consist of state or local government funds, and not ‘non-bona fide donations’ from private health care providers, such as hospitals.” A non-bona fide donation is a payment “from a private provider to a governmental entity that is then returned to the private provider as the state share of Medicaid.” The donation from the private provider then “triggers a corresponding federal expenditure for the federal share of Medicaid, which is also paid to the private provider.”

This conduct is against the law and “causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services.”

The U.S. government alleges that between October 2013 and September 2015, BayCare “knowingly caused false claims for federal Medicaid matching funds to be submitted” to the U.S. Allegedly, BayCare made non-bona fide cash donations to the Juvenile Welfare Board of Pinellas County (JWB) knowing that JWB “would and then did transfer a portion of the cash donations to the State of Florida’s Agency for Health Care Administration for Florida’s Medicaid Program.” The funds that JWB transferred to the state were then “matched” by the federal government “before being returned to the BayCare hospitals as Medicaid payments, and BayCare was thus able to recoup its original donations to JWB and also receive federal matching funds, in violation of the federal prohibition on non-bona fide donations.” In short, “BayCare’s donations to JWB increased Medicaid payments received by BayCare, without any actual expenditure of state or local funds.”

The whistleblower who filed the qui tam case, Larry Bomar, will net $5 million, which is his share of the settlement.

“Medicaid is a partnership between the federal government and state governments,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in the press release. “When private parties make unlawful, non-bona fide donations to state or local governments, they undermine a key safeguard for ensuring the integrity of the Medicaid program.”

As shown in these two cases, and many cases from FY 2021, whistleblowers are essential to rooting out fraud in the healthcare industry. Their brave actions in exposing kickback schemes, frauds, and exploitation of the federal healthcare programs protect patients and their well-being.

Read the OGCC press release here.

Read the BayCare press release here.

Read more False Claims Act/qui tam news on WNN.

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