Whistleblower Wins $57 Million Settlement Against Largest Not-For-Profit Health Care Agency in the Country

medicare fraud

Fake doctor, quack or charlatan in hospital office. Medical crime, illegal health care, insurance fraud, negligence, treatment error or malpractice. Man in dark hospital typing computer prescription.

On June 25, the Visiting Nurse Service of New York (VNSNY) agreed to pay $57 million to the government to settle a whistleblower lawsuit. Whistleblower Edward Lacey claimed that the not-for-profit nursing service defrauded the Medicaid and Medicare programs out of tens of millions of dollars.

Lacey was a high ranking executive at VNSNY for 16 years before he filed his False Claims Act complaint in July of 2014. He alleges that VNSNY took on more patients than it could provide services to maximize reimbursement from Medicare and Medicaid. VNSNY has a policy that they accept all referrals they get from other hospitals and doctors. Lacey said that many of the home visits and services outlined in the Plans of Care that the company billed to either Medicare or Medicaid never happened.

When Lacey filed his False Claims Act complaint in 2014, the federal government did not intervene and aid in the case. Often, when the government passes on a False Claims Act lawsuit, the case is doomed to failure because of the high legal fees required to continue or countersuits brought by the defendants, usually large and wealthy companies. VNSNY serves roughly 150,000 patients, making it the largest not-for-profit health care provider in the country. This settlement vindicates the whistleblower and demonstrates the False Claims Act’s efficiency in exposing fraud in powerful companies.

Because of the incentive-based qui tam provisions of the False Claims Act, the whistleblower is due between 25 and 30% of the total settlement. The federal government will award him millions of dollars for standing up and doing the right thing when he saw fraudulent activity in his company. This settlement is a victory not only for the taxpayers but also for the tens of thousands of elderly or infirm patients across the country.


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