Laboratory Fraud
WHAT IS LABORATORY FRAUD?
The False Claims Act (31 U.S.C. §3729-3733) is the oldest qui tam law, originally acted in 1863 and amended in 1943 and 1986. Since its 1986 amendment, it has proven to be the most effective anti-fraud law in the U.S. The term “relator” refers to the source of the original fraud against the government. In modern whistleblower laws, “relator” is typically used by courts and parties to signify a whistleblower.
One category of violations under the False Claims Act is Laboratory Fraud. The increasing availability of testing services has given rise to a surge in fraudulent and illegal practices by laboratories. These laboratories seek to defraud the government through their abuse of Medicare and other third-party payors. Laboratory fraud occurs when clinical laboratories purposely falsify results and medical tests, or deceive doctors into conducting medically unnecessary tests.
COMMON TYPES OF LABORATORY FRAUD
Common types of laboratory fraud include:
- Billing Medicare and Medicaid for medically unnecessary tests
- Billing for tests that have not been performed
- Billing for tests on expired medium
- Unbundling tests to bill each test individually
- Performing tests at an unlicensed facility
- Billing tests that were performed by unlicensed or unqualified personnel
- Violating the Anti-Kickback Statute and False Claims Act through physician and hospital incentivized referrals
- Deliberate evasion or violation of the regulatory requirements of the Clinical Laboratory Improvement Act (CLIA)
WHY IS LAB FRAUD HARMFUL?
Medicare provides the largest payments to clinical laboratories in the United States. In 2017 alone, Medicare paid over $7 billion for laboratory services. Despite the rigid regulatory framework around Medicare, the tremendous amount of taxpayer dollars allocated towards laboratory services incentivizes laboratories to exploit the system.
Laboratories that prioritize profits by cutting corners, evading regulation, and ignoring health safeguards pose a significant risk to patient safety, all at the enormous expense of U.S. taxpayers.
Amid a global viral pandemic, our dependence on clinical laboratories has never been greater. Although some laboratories faithfully fulfill their duties and serve a vital role in our healthcare system, other laboratories and testing facilities ignore their ethical responsibilities and willfully participate in fraudulent practices, leading to massive waste and abuse of taxpayer dollars, and causing untold harm to the integrity of healthcare delivery.
The United States has already recovered tens of millions of dollars in false claims from laboratories, yet these fraudulent practices still continue. In the midst of the COVID-19 global pandemic, these harmful and illegal practices pose an even more ominous threat to patient safety. Fortunately, False Claims Act cases brought by whistleblowers serve as a powerful check against these fraudulent practices.
PROTECTION AND REWARDS FOR HOSPITAL WHISTLEBLOWERS
The False Claims Act relies on whistleblowers to flag and report fraudulent medical practices. Because of this important role, the government takes a myriad of measures to protect whistleblowers against workplace retaliation. Under §3730(h) of the False Claims Act, any employee who is discharged, demoted, harassed, or discriminated against because of lawful acts by the employee in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole. Such relief may include: reinstatement, double back pay, and compensation for any special damages including litigation costs and attorneys’ fees.
In addition to workplace retaliation protection, whistleblowers who file a False Claims Act lawsuit may also receive monetary rewards. If the government intervenes and takes the case, then the whistleblower may receive between 15% to 20% of what the government recovers. If the government does not intervene and the whistleblower’s attorney moves forward with the case, then the whistleblower’s share increases to 25% to 30%.
STEPS TO REPORT LABORATORY FRAUD
If you are aware of laboratory fraud and are ready to report this illegal practice, follow these steps:
- Contact a Laboratory Fraud attorney for a confidential, free consultation. During this initial meeting, your lawyer will discuss your options and protection going forward.
- If your case qualifies for a qui tam lawsuit, the claim will be filed by your attorney against the party committing the fraud. This suit is filed under seal and remains so during the course of the investigation–your identity is protected throughout the process.
- The federal government will decide whether or not it will intervene. If the government declines to intervene, then you and your attorney will proceed with the litigation. If the government does intervene, as it does 15% of the time, then they will litigate the case going forward.
- If the government proceeds, then you will still be entitled to 15%-20% of the recovery. If you and your lawyer achieve a successful result, then you will be entitled 25%-30% of the recovery.
If you choose to meet with a lawyer to discuss your knowledge of laboratory fraud, that does not mean that you are committing to filing a lawsuit, it is simply a way to assess your options.
THE IMPORTANCE OF A SKILLED WHISTLEBLOWER LAWYER
Price Armstrong attorneys know how to navigate false claims cases and have experience filing cases on behalf of whistleblowers working in clinical laboratories around the country. Specifically, Price Armstrong has filed claims under the False Claims Act against companies who have defrauded Medicare and Medicaid. These claims highlight the wrongdoings of laboratory companies, including the following: billing for medically unnecessary services, failing to comply with state and federal regulations, producing inaccurate test results, and employing inadequately trained staff.
HOW WE REPRESENT YOU
If you have detected fraud or wrongdoing, it can be difficult navigating what to do next. Price Armstrong has extensive experience litigating all types of whistleblower cases, including laboratory fraud. This experience helps maximize the recovery for both the whistleblower and the government and ensures protection of your interest at all times. If you are a whistleblower, or are considering blowing the whistle on illegal, fraudulent behavior, it is important to discuss your case with an experienced qui tam lawyer. Call Price Armstrong today for your free initial consultation. Every consultation we make is entirely confidential.
We will help you review your legal options and protect you along the way as you take this important stand against fraudulent and illegal activity. If we file your case, we work on a contingency-fee basis, meaning that our clients do not pay anything unless their whistleblower case succeeds.
CONTACT US FOR A FREE CASE EVALUATION
If you have evidence of past or ongoing laboratory fraud, contact the attorneys at Price Armstrong. We can help you seek justice and protect your rights throughout the process. We represent clients nationwide with offices in Birmingham, AL, Tallahassee, FL and Albany, GA.Call us today at (205) 208-9588 for a free initial consultation and review of your case. Let us fight for you – call now!
