New York Whistleblower And Commercial Litigation Blog

It was recently reported, that, after four different employees blew the whistle on false and inflated claims to Medicare and Medicaid, two healthcare concerns have admitted responsibility and agreed to pay a $14.7 million settlement. One was Health Quest Systems, Inc., a New York-based family of hospitals and healthcare providers delivering medical, surgical and home healthcare services. The other was Putnam Health Center (PHC), a Health Quest subsidiary based in Carmel Hamlet, New York.

One of the whistleblowers will receive $1,893,092 as a reward. Another will receive at least $875,546, and the other two will share in a reward of $56,266. The four whistleblowers filed three False Claims Act lawsuits which the government later joined. When such lawsuits are successful, the private citizens who initiated them can receive a substantial percentage of the overall recovery.

As a concept, whistleblowing is a two-edged sword. Sometimes, both edges are positive. This is perhaps most clear on a field of play under the control of referees. On one hand, when an official blows the whistle, one side or the other faces penalties for breaking the rules. On the other, the whistle stops the action, preventing unnecessary injury to players.

Off the playing field, whistleblowing tends to have positive-negative effects. While acknowledged as essential for fighting fraud and corruption in government and private business, being tagged with the label can prove a burden. As evidence, look up synonyms for whistleblower. The list includes, informer, snitch, mole and tattletale.

In 2009, the National Energy and Technology Laboratory (NETL) awarded a $14-million cooperative agreement to a company called North American Power Group Ltd. (NAPG) to collect and analyze carbon data and to design and implement carbon sequestration wells in Wyoming. NAPG's owner, Michael Ruffatto, represented the company and authorized its invoices. Between 2009 and 2012, he billed NETL some $5.7 million for project-related costs.

Those claimed costs were fraudulent. Instead of project-related costs, Ruffatto billed for his legal fees, jewelry, car payments, international travel and other personal expenses.

"When hospices increase their bottom lines by billing taxpayers for unneeded services, they are diverting money from vulnerable, terminally-ill individuals," said a spokesperson for the U.S. Department of Health and Human Services Office of the Inspector General. "Worse yet, these patients may not be receiving care for medical needs that would otherwise be covered in a non-hospice setting."

According to the Department of Justice, a for-profit hospice chain called Caris Healthcare set aggressive admissions and census targets, which are known to be a risk for fraud. In order to meet those targets, the government alleges, Caris admitted and often recertified patients for hospice care even though their medical records did not support the terminal prognosis required for Medicare's hospice benefit.