Milwaukee Employment Law Blog

Surrounded by mountains and forest, Kalispell, Montana, is the gateway to one of the nation’s natural wonders: Glacier National Park. The beautiful scenery is a backdrop to an ugly scandal focused on the 138-bed hospital that takes its name from the town. The medical center has been roiled by charges that physicians there took illegal kickbacks and defrauded the federal government.

Kalispell Regional Healthcare recently agreed to pay $24 million to settle the whistleblower lawsuit that blew the lid off of the scheme. According a news source, it’s the largest False Claims Act recovery in Montana’s history.

There is a difference in how government health care programs reimburse health care providers for Medicare Part A services as compared to Part B and Part D Medicare services. Some commentators believe that the different arrangements tempt some health care providers to create schemes to increase profits through reimbursement.A whistleblower says that he noticed a billing discrepancy in the way a Kentucky-based pharmacy company that serves nursing homes negotiated its prices under Part A when dealing with nursing home facilities. He initiated a whistleblower lawsuit alleging that the institutional pharmacy service provider used a scheme, commonly referred to as “swapping,” to defraud Medicare.

Creating unfair incentives to bring in business in the health industry may be the basis for a claim under the False Claims Act. Improper contracts may come in a variety of forms. Kickback schemes and similar inducements to increase revenues from Medicare or Medicaid reimbursements are often the focus of health care fraud lawsuits. Private individuals may initiate a lawsuit on behalf of the government to expose fraud in government contracts.

Providing Services At Low Cost To Induce Long-Term Contracts

Health care fraud costs taxpayers an exorbitant amount of money.  The federal government, however, does not always detect fraudulent practices in processing Medicare, Medicaid, Tricare and similar reimbursement invoices from health care providers nationwide. Many instances of fraud related to government contracts and health care programs are discovered by workers in the relevant industries. Health care workers at any level may detect irregularities in billing practices that unfairly cost taxpayers more money than the services are worth.

The Department of Justice says that a dermatology practice in the South violated the False Claims Act by overcharging Medicare and Medicaid for services provided to residents of assisted living facilities, retirement communities and similar entities. The dermatology practice allegedly abused the rules related to non-melanoma skin cancer services using superficial radiation therapy. The end-result, according to a recent lawsuit, was increased revenues to the health care providers without a medical basis.