Former CEO of a physician-hospital practice venture, Robert Dannenhoffer, MD, filed a lawsuit in federal court alleging his former employer terminated the doctor’s position in retaliation for Dannenhoffer reporting a $10 million Medicare fraud scheme. Dr. Dannenhoffer led investigators to discover a fraudulent payment scheme, by which doctors were being compensated more money in exchange for prescribing certain medical procedures and prescription medications to Medicare patients, regardless of whether they were necessary, according to reports. The lawsuit alleges violations of the False Claims Act and the Stark Act, a federal patient referral law. As a whistleblower under federal law, Dr. Dannenhoffer seeks and may be entitled to the reinstatement of his position, back pay, punitive damages and attorney’s fees.[i]
Medicare Fraud is often reported and exposed by whistleblowers who may share in court awards.
Medicare fraud costs U.S. taxpayers significant money every year when fraudulent reimbursements and overpayments are claimed and paid for treatments never provided to patients, suppliers billing for equipment never obtained and even the use of false information to mislead an individual to joining a Medicare plan. Doctors in physician-hospital practice ventures, like Dr. Dannenhoffer, may be liable for Medicare fraud occurring in their practice, even despite their potential lack of personal knowledge. By reporting the suspected fraudulent behavior as a whistleblower, a physician like Dr. Dannenhoffer not only may avoid liability for fraud, they may recover a percentage of any amounts for which the case settles or for which a judge rules in favor of the government.
Dr. Dannenhoffer is the whistleblower in this Medicare fraud scheme in which over $10 million worth of fraudulent and inflated Medicare payments are identified. The doctor claims that after he filed his federal whistleblower lawsuit, he was fired as CEO of the major healthcare provider where he worked and was blacklisted in the medical community.
The doctor claims his healthcare company violated the False Claims Act and the Stark Act.
Federal law codified in the False Claims Act (FCA)[ii] imposes liability on individuals and organizations, often federal contractors, who defraud government programs such as Medicare. The FCA, imposes damages and penalties for any individual who knowingly submits or causes another to submit a false claim to the government, or knowingly makes a false record or statement to obtain a false claim paid by the government. The current amounts of penalties can amount to three times the dollar amount of the claim plus fines of $5,500 – $11,000 per claim.
An individual reporting Medicare fraud may also file an intervening lawsuit on behalf of the government, a qui tam action, and the whistleblower’s identity is kept under seal. The whistleblower may share in the financial settlement or recovery, between 15 and 25 percent of the amount. The law works this way to encourage more individuals to step forward and report Medicare fraud.
The Stark Law[iii] is a section of the Social Security Act and is known as the physician self-referral law. Physicians may not make referrals and receive payment Designated Health Services[iv] payable by Medicare to an individual or group where the physician or their immediate family member are an owner or have an ownership interest. In this case, Dr. Dannenhoffer was not allowed to make referrals to the organized medical service venture in which he was a partner with interest.
Being a whistleblower has its costs, but it is better to discover and report Medicare violations, than to worry about civil and criminal liability for participating or failing to report fraud.
Michael V. Favia and Associates can help physicians who learn or receive notice of Medicare fraud activities. With many local, state and federal agencies working together to investigate and stop health care billing fraud, reporting a violation as a whistleblower may be the only option an individual has when they otherwise could face civil and criminal liability and penalties, including imprisonment. Of course, Favia and his team can also offer physicians a review of their billing procedures and protocols to assess risk and exposure to potential fraud. When your chain is only as strong as its weakest link, it makes sense to regularly examine that chain.
Chicago health law, litigation and professional licensing attorney, Michael V. Favia and the associate attorneys of Michael V. Favia and Associates, P.C. represent individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates, please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.
[i] Beckers Hospital Review, Ex-CEO claims retaliation for blowing the whistle on $10M in false Medicare charges, by Ayla Ellison, Jan. 27, 2016.
[ii] The False Claims Act 31 U.S.C. §§ 3729–3733
[iii] The Stark Act 42 U.S.C. § 1395nn