Hill-Rom, a company located in Batesville, Indiana, manufacturers hospital beds.  In particular it produces bed supports designed to treat pressure ulcers and bedsores.  According to the recently settled  qui tam case, over the last decade Hill-Rom has been fraudulently billing Medicare for supplying beds, and bed supports to patients who did not qualify for the use of the medical equipment.  The qui tam case settled for $41.8 million. It represents the largest settlement recovered in the Eastern District of Tennessee.

According to the settlement, Hill-Rom submitted claims to Medicare for patients who did not qualify for the equipment, including patients who had died, patients no longer using the equipment or had been moved to nursing homes.  Hill-Rom provided this equipment nationwide and according to the Department of Justice there were hundreds of thousand of patients involved.  Hill-Rom provided incentives such as gift certificates and large televisions to its sales representatives for boosting sales.  Even though an internal audit in 2003 revealed the billing errors, Hill-Rom did not correct them.

In addition to the large civil monetary settlement, Hill-Rom also entered a Corporate Integrity Agreement with the Department of Justice that will ensure the company five years of close federal scrutiny.

As reported in the Walls Street Journal last week, the U.S. Department of Justice and other government agencies charged 94 individuals across five states on Friday, accusing them of submitting a combined $251 million in fraudulent claims to Medicare, the largest takedown since the Medicare Fraud Strike Force began operating three years ago.

The government’s multi-agency task force unveiled the charges related to separate schemes in Miami, Baton Rouge, La.; Brooklyn, N.Y.; Detroit and Houston, which included using a variety of medical services and fraud schemes that overcharged the government’s health program in order for the defendants to pocket reimbursement money.

“The Department of Justice has increased efforts to combat Medicare Fraud.” says Joel Androphy, Partner at Trial Firm Berg and Androphy.  ”Criminal charges have been brought against medical service providers in 5 cities.   Although a whistleblower – qui tam – lawsuit is the best weapon to combat fraud, it is important for the DOJ to independently pursue criminal charges.   Qui Tam lawsuits are about money.   Many qui tam lawsuits are not pursued, however,  because the perpetrators have no money.  Criminal cases will send people to jail.”

Under the reform overhaul, whistleblowers — a role doctors sometimes can play — are given more opportunities to help root out fraud, said Joel M. Androphy, a partner at the Houston-based firm of Berg & Androphy, who specializes in whistleblower litigation. The health reform law now allows them to initiate false claims actions based on information already publicly disclosed through state or local administrative reports or proceedings, such as a state Medicaid audit. Read More

The respected Robert Wood Johnson University Hospital is set to pay over $6 million in order to settle allegations of Medicare fraud.

Two federal lawsuits brought against the hospital claim that bills to the hospital’s Medicare patients were fraudulently inflated in order to gain larger payments from the Medicare program. The federal program supplies supplemental reimbursements, known as “outlier payments,” to health care institutions when the cost of care is unusually high. Robert Wood Johnson University Hospital is accused of inflating costs in order to gain access to these outlier payments, which were created as a protection to health care providers who might be giving care to patients with extraordinary conditions.

Both federal lawsuits were brought under Qui Tam provisions of the False Claims Act. The whistle blowers will receive just over $1.1 million in compensation for reporting the alleged fraud.

To date, with the help of whistle blowers, the Justice Department has been able to regain nearly $1.1 billion in outlier payment fraud.

A pilot program run by Medicare in three states (California, New York and Texas) claimed $900 million in fraudulently claimed money in the last three years. The program focused on regaining taxpayer money that had been paid out to hospitals and doctors based on fraudulent or overcharged bills.

This week, President Obama announced the expansion of the program to a Federal level. Auditors, known around the White House as “bounty hunters” have been deployed around the nation to identify and investigate fraudulent Medicare and Medicaid charges.

Auditors will receive a small percentage of the regained money as an incentive to finding improper payments. “It’s estimated that improper payments cost taxpayers almost $100 billion last year alone,” President Obama said on Wednesday, “If we created a Department of Improper Payments, it would actually be one of the biggest departments in our government.”

The program works by empowering auditors to use state of the art computer programs that troll through records to identify fraudulent claims. Auditors then use more traditional means to track and investigate suspicious claims.

The Office of the US Attorney in Los Angeles announced this week that Manuk Karapetyan, a 46 year old healthcare clinic owner, has been convicted of Medicare fraud. Karapetyan allegedly fraudulently billed more than $3.4 million to Medicare in the names of four doctors whose identities he had stolen. The fraudulent claims came on behalf of nearly 800 patients who were supposedly treated at a non-existent medical clinic, USA Independence Medical Corp.

Karapetyan had been paid $566,000 form Medicare funds by the time he was discovered. The investigation began when the patients whose names Karapetyan had used began to submit fraud complaints to their doctors and Medicare after reviewing their bills and noticing unexpected charges filed in their names.

Sentencing for Karapetyan, who has been in custody since April of 2009, is scheduled for June 21. He could receive up to 320 years in prison for fraud and identity theft.