The False Claims Act and Hospital Fraud: Protecting Whistleblowers In NYS

By David DeToffol | August 31, 2023

I. What is the False Claims Act?

In plain English, an employee whistleblower is a person who witnesses their employer commits an illegal act, and instead of staying silent, they speak out. This is where the False Claims Act comes in: The Federal False Claims Act is a law that allows the United States government to bring a civil lawsuit against a company or person who has submitted a fraudulent claim for payment to the U.S. government – and often the government finds its target because an employee whistleblower has stepped forward.

In non-legal terms, companies receive money from the federal government all the time. Sometimes, they obtain it under a contract with the federal government (i.e., a construction contract); other times, they get it from a government program (like Medicare or Medicaid). Regardless, the United States Government pays out an unfathomable amount to private companies based on the company’s claim/assertion that they are owed money under a federal contract or program. For example, when a Medicare beneficiary receives treatment in a hospital, the hospital, through an administrator, submits the bill for the treatment to the Centers for Medicare & Medicaid Services (CMS). CMS is a government agency. Therefore, whenever a hospital wants payment through Medicare, they are essentially submitting a request (aka a claim) to the government for payment. And if that payment is fraudulent, the hospital could find themselves in hot water under the False Claims Act.

II. When Does Hospital Billing to Medicare or Medicaid Become Fraudulent?

When a hospital “knowingly” submits fraudulent claims for payment under Medicare or Medicaid, they may be the target of a False Claims Act lawsuit. What does this look like? Here is an example of what can be considered the fraudulent practice of “unbundling” in New York State:

Example: When a patient undergoes an outpatient surgery, the hospital receives a single bundled Medicare payment that covers the entire surgery cost, including the recovery and observation period. This bundled payment is designed to cover all the necessary services and care associated with the surgical procedure. However, a doctor observed that the hospital was billing patients separately for observation status during their routine recovery from outpatient surgery. By billing observation status separately for patients recovering from outpatient surgery, the hospital was essentially “double dipping” or “unbundling” the charges. This means that the hospital received two separate payments for the same recovery period: one as part of the bundled payment for the surgery itself and another through separate billing for observation status. This practice may be fraudulent and non-compliant with the appropriate billing guidelines, as it allows the hospital to receive multiple payments for a single service, ultimately leading to inflated reimbursements.

III. Are Nurses and Doctors Protected Under the False Claims Act?

Luckily, protections are built into the False Claims Act for those who step forward and report fraud or refuse to participate. Such safeguard provisions in law are often referred to as anti-retaliation provisions. This means an employee who is a qualified whistleblower under the false claims may be entitled to monetary compensation if their employer terminates them for doing so. Moreover, to get these protections, the employee likely doesn’t have to prove the fraudulent claim was submitted but instead may demonstrate that they only had a reasonable belief that the fraud existed. So yes, doctors, nurses, and other hospital staff are protected by the anti-retaliation provision of the False Claims Act.

It’s time to take action. Don’t struggle in silence – contact the expert New York Whistleblower Lawyers at DeToffol & Gittleman at (212) 962-2220 or fill out our online form for a free, no-obligation consultation today. Together, we can navigate the complexities of your situation, understand your rights, and work diligently to secure the fair and just treatment you are entitled to under the law. Don’t wait! Your rights and your job are too important. Contact us today, and let’s start the journey towards resolution and fairness.

The content presented in this blog aims to provide general information regarding the False Claims Act and its implications. It is essential to understand that the False Claims Act involves many intricate steps and procedures to preserve a claim. This blog post should not be taken as legal advice or seen as a comprehensive guide for those wishing to bring a case pro se. If you’re considering taking action under the False Claims Act or have concerns about potential fraud, it is crucial to consult a legal professional with expertise in this area.