Skilled Nursing Facilities & Hospice Fraud
The door is open for opportunistic providers.
Whistleblowers are essential in reporting and ending fraudulent practices that cost the government money and threaten the effectiveness of patient care.
What is Skilled Nursing Facilities fraud?
A skilled nursing facility is a long-term care option for patients who suffered a debilitating injury or illness (like a stroke). After a qualifying stay in the hospital, Medicare beneficiaries frequently need time in a rehabilitation center to recover. A skilled nursing facility provides services like physical therapy, occupational therapy and speech therapy and specialized services for patients dealing with conditions like stroke recovery, Parkinson’s disease care or injury care.
In 2016, Medicaid spent nearly $17 billion on hospice services alone and in 2015, Medicare spent $29.8 billion on skilled nursing.
Skilled nursing and hospice care are some of the most expensive areas of healthcare that Medicare and Medicaid cover. The way the government pays skilled nursing and hospice providers leaves the door open for opportunistic providers to commit Medicare fraud. This fraud can occur in a number of ways, but nursing home or hospice fraud often involves providers seeking and receiving more than they have earned from the government.
A skilled nursing facility is a business and is therefore susceptible to improper practices, illegal deal making and fraud for financial gain. There are a few common types of skilled nursing facility fraud:
- RUG fraud – A patient in a skilled nursing facility may be placed in the highest resource utilization groups (RUG). This category reimburses the rehab center the most Medicare money. The patient may receive excess or unnecessary care that can be harmful to their recovery. For example, a patient recovering from a stroke may receive unnecessary physical therapy on their knee or ankle that was not in their care plan.
- Upcoding – Providers may file for reimbursement at a higher level of care than the level actually provided or medically necessary. The procedure codes used are often reimbursed at a higher rate.
- Unbundling – Skilled nursing facilities can also commit fraud by unbundling the services they provide. In order to increase revenue, providers may code services individually that cost more than the service normally would under a different code.
- Kickbacks – Kickbacks or bribes are also a prevalent form of skilled nursing facility fraud. This occurs when a provider receives a monetary benefit from referring a patient to a specific care institute. It’s illegal for anyone to provide or offer anything of value in order to have that person give them referrals or generate healthcare business.
- Medicare Eligibility Requirements – A facility may be billing Medicare for services rendered to patients who do not meet Medicare’s eligibility requirements for the types of services being billed.
These forms of skilled nursing facility fraud are illegal under a number of statutes and regulations; most importantly the False Claims Act (FCA). In such cases, the victims are the residents, receiving improper or unnecessary care so that providers can illegally obtain more funding through healthcare programs like Medicare and Medicaid.
With the help of an attorney, whistleblowers can put a stop to this kind of Medicare fraud. In skilled nursing facility fraud cases, settlements can range between $10 million up to $145 million.
What is Hospice fraud?
Hospice care is the palliative care provided at the end of a patient’s life. The goal is to ease the suffering of the patient, treating their emotional and physical pain, and to provide some support to the family of the patient. These services can take place in a facility or at the patient’s home. In practice, hospice can be an extremely valuable service for the patient and their family.
Providers have paid dearly for committing hospice fraud. In False Claims Act cases, with settlements have reached as high as $76 million.
Many hospice providers take advantage of the structure of payment they receive from the government and commit hospice fraud. Facilities committing hospice fraud do so in similar ways that skilled nursing facilities do. They will falsely claim a higher level of care than given or medically necessary, including billing for continuous home care when only routine home care is given or medically necessary. They may even falsely claim that a patient requires continuous home care when the patient actually does not require any hospice care at all.
Hospice providers can also commit fraud in the form of providing kickbacks for referrals.
Protection & Rewards
The False Claims Act.
The False Claims Act ensures that any whistleblower who brings claims exposing government fraud is protected. The Anti-Retaliation provision in the False Claims Act establishes that an employee, contractor, agent, or any other type of whistleblower which is employed by the company at issue cannot be retaliated against, or threatened for retaliation, for their actions.
Protection against Retaliation or Harassment.
Retaliation could take the form of harassment, dismissal, demotion or disciplinary measures. Harassment could also include such behaviors as failing to renew the contract of a whistleblower, withdrawing certain privileges (such as access to training), or the loss of responsibilities (marginalization).
Billions have been recovered. Up to 30% awarded.
In 2023 alone, whistleblowers helped the government recover $2.68 Billion. For their courage and assistance, a whistleblower can be awarded 15% to 30% of the amount recovered in their case.
Frequently Asked Questions
Can anyone bring a qui tam or whistleblower action?
If you have specific information about a violation of the False Claims Act or government fraud, then you may bring a qui tam action, unless you are a current or former member of the Armed Forces or convicted of criminal misconduct involving the same misconduct. Even if you are a participant in the fraud, you are allowed to be a whistleblower. In fact, many whistleblower cases are brought by employees or contractors who discover fraud in the course of their employment.
What if I participated in the fraud?
If you unknowingly participated in the fraud, or were coerced by your employer to participate, your whistleblower case and potential compensation will not be impacted. If you knowingly participated in the fraud, consequences and potential earnings will be based on the level of your participation. Do not let your level of participation in the fraudulent activities stop you from contacting a lawyer – your case will remain sealed and confidential.
How are qui tam plaintiffs compensated?
Qui tam plaintiffs receive a percentage of the recovery in the qui tam action. This is usually between 15% and 25% if the government intervenes in the matter. If the government does not intervene, then plaintiffs may receive up to 30% of any recovery. Part of the role of your qui tam attorney should be to advocate for an appropriate compensation for any whistleblower.
How do I file a qui tam case?
A qui tam action is filed in the United States District Court off of the public record. Your qui tam attorney will be able to help you file your complaint and protect your rights during this time.
Will my qui tam case be sealed?
Under the False Claims Act, every qui tam lawsuit is initially filed “under seal” in federal court. This means that the identity of the whistleblower is protected from public disclosure for a period of time to allow the government to investigate the conduct alleged. If you file a qui tam case, this investigation period is crucially and it is important to have attorneys who are experienced and equipped to work in concert with the government.
Does it matter how quickly I file?
Yes, when you file your whistleblower lawsuit can be important, for at least two reasons. First, all claims under the False Claims Act are subject to a statute of limitations which can prevent recovery if a case is brought too late in some circumstances. Second, particularly for fraud that is widespread throughout a company, multiple cases may be filed by different whistleblowers. As the False Claims Act provides for the anonymity of whistleblowers to be protected during the investigation phase of qui tam cases, only the government may know of the extent of these filings. A “first to file” rule can apply which limits the role and recovery of any subsequent whistleblower who files after the first case.
Is government contractor fraud common?
Government contract fraud is more common than many believe. One of the primary examples of government contractor fraud comes from defense contractors. The U.S. spends hundreds of billions each year on our national defense. Some of the ways defense contractors attempt to perpetrate fraud on the federal government include:
- Inflating the charges and costs of items;
- Violating the Truth-in-Negotiations Act;
- Providing military items which fail to conform to the original contract;
- Improperly allocating costs;
- Improperly substituting products;
- Cross-charging;
- Price-fixing;
- Collusion and bid-rigging;
- Overcharging for materials, labor or supplies, and
- Falsifying information to convince the government to agree to a contract.
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