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Whistleblower claim yields 6-state, $33-million fraud settlement

Seven years ago, two doctors stood up to powerful players in the emergency medical field by blowing the whistle on Medicare fraud. Their courage and hard work contributed to settlements of more than $33 million between two large physician groups and the Justice Department. As a result, the two whistleblowers will receive over $6.2 million.

The two settlements involve allegations of a large conspiracy between a major chain of hospitals and at least two physician groups. They allegedly worked together to defraud Medicare through kickbacks, upcoding and unnecessary tests. The settlement was handled by the U.S. Attorney for the Western District of North Carolina, and the alleged fraud affected North Carolina and six other states.

According to the Justice Department, a Dallas-based physician group called EmCare conspired with hospitals owned by the now-defunct Health Management Associates (HMA). HMA and EmCare actually had incentives in their contracts encouraging EmCare doctors to increase the admission of ER patients for inpatient hospital services.

As a result, between 2008 and 2012 EmCare physicians allegedly received kickbacks for referring patients for inpatient services when they should have received outpatient care. Medicare pays, on average, three times as much for inpatient care as outpatient care. The Charlotte Observer adds that, once the patients were admitted, the doctors would also order costly, unnecessary tests in order to up their Medicare reimbursements.

EmCare will pay the federal government $29.6 million to resolve the Medicare fraud claims. It is a subsidiary of Envision Healthcare Corporation, and Envision has also agreed to enter into a corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

In a separate agreement, Lancaster-based Physician's Alliance Ltd. (PAL) and three of its executives have agreed to pay $4 million, along with a portion of the proceeds from the sale of a PAL-HMA joint venture, to settle fraud allegations.

According to the Justice Department, PAL received kickbacks from HMA between 2009 and 2012. These kickbacks were also to refer patients to HMA hospitals.

"The Hippocratic oath enjoins physicians to do no harm, not maximize profits by pocketing illegal referral payments," said a special agent with HHS's Inspector General's Office.

The Observer also noted that HMA paid over $98 million in 2014 to resolve seven other whistleblower claims.

When doctors take kickbacks, it compromises sound medical decision-making. It also compromises the integrity of our healthcare system and cost the government millions of dollars.

That's why whistleblowers are given a share of the awards and settlements in these cases. If you are in a position to blow the whistle on fraud, waste or abuse against Medicare or Medicaid, we urge you to contact an attorney familiar with qui tam cases.

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