Healthcare Fraud

The federal government spends billions of dollars each year on healthcare and prescription drugs for Americans through Medicare, Medicaid, and other medical programs. If a doctor, hospital, or nursing home overcharges or otherwise submits false billing claims to these programs, taxpayer dollars have essentially been stolen.

To help remedy this injustice, the federal False Claims Act allows ordinary citizens with knowledge of fraud in federal healthcare programs to file a whistleblower lawsuit to help the government collect the amount that has been defrauded, as well as additional fines and penalties. In exchange for your courage in stepping forward and blowing the whistle, you may be entitled to receive a substantial financial reward.

Does collecting and disclosing protected health information violate HIPAA?

One concern that potential healthcare whistleblowers often have is whether collecting and disclosing protected health information violates HIPAA.

HIPAA’s Privacy Rule in fact has a Permitted Use/Disclosure clause that allows individuals to disclose protected health information to a health oversight agency, public health authority or attorney, as long as that information pertains to professional misconduct.

This is a very important exemption to HIPAA’s Privacy Rule, because effective whistleblower cases often require the disclosure of key documents in order to prove that illegal acts have been committed. Not surprisingly, this exemption is not widely publicized by the healthcare industry.


The government is actively seeking any information with regard to fraudulent billing practices against Medicare, Medicaid, or TRICARE. Whether you are an employee, independent contractor, or business associate of a healthcare organization that may be defrauding the government, our whistleblower attorneys can help you report Medicare fraud. For a confidential meeting with an experienced whistleblower attorney, please complete the case review form on this page.

Whistleblower lawsuits in recent years have involved the following types of Medicare and Medicaid fraud:

  • Phantom Billing – Phantom billing occurs when a hospital or healthcare organization bills Medicare or Medicaid for tests or services not performed.
  • Billing for Unnecessary Services – Healthcare organizations may be subject to liability under the False Claims Act for billing for services or procedures that are not medically necessary, such as providing patients with unnecessary stent implants.
  • Kickbacks – It is illegal for healthcare providers to make or accept payments for referring, recommending, or arranging for the purchase of items paid for by federally-funded programs. The healthcare organization making or receiving the bribes can be held liable for damages under the False Claims Act.
  • Up-Coding – Up-coding occurs when a hospital or other healthcare organization fraudulently alters diagnosis or treatment codes to receive higher reimbursements from Medicare or Medicaid.
  • Unbundling – Unbundling occurs when a medical lab or healthcare facility bills Medicare or Medicaid separately for related services to receive a higher rate of reimbursement. Instead, the facility should use a billing code that bundles the related services as required by Medicare and Medicaid.
  • Double Billing – It is illegal for hospitals and other healthcare organizations to charge twice for a service or procedure that was only performed once.
  • Waiving Co-Pays – Hospitals or other healthcare organizations may be liable for damages under the False Claims Act if they waive co-pays to encourage patients to seek treatments that they might otherwise opt not to receive.
  • Substitution of Generic Drugs – It is illegal for pharmacies to bill Medicare or Medicaid for the cost of name-brand prescriptions when a generic drug was given to the patient.
  • Submitting Fraudulent Cost Reports – Medicare reimburses hospitals, nursing homes, and other healthcare organizations for certain costs, in addition to paying for individual procedures and treatment. Healthcare organizations that knowingly inflate costs or mischaracterize costs as reimbursable may be held liable under the False Claims Act.
  • Noncompliance with FDA Regulations – Pharmaceutical companies, medical device manufacturers, and medical equipment makers must comply with a long list of FDA rules and regulations with regard to obtaining FDA approval. Furthermore, these companies must certify that the drugs or medical devices are manufactured in accordance with current Good Manufacturing Practice (cGMP) regulations. Violations of FDA rules and regulations may subject pharmaceutical, medical device, and medical equipment companies to liability under the False Claims Act.
  • Knowingly Providing Defective Medical Products or Services – Under the False Claims Act, drug companies and medical device manufacturers can be held liable for knowingly producing or providing products and services that are defective.

Medicare Fraud at Hospitals and Healthcare Organizations

Whistleblower lawsuits involve many different types of Medicare fraud at hospitals and healthcare organizations. Common examples of healthcare fraud include billing for services that were not provided, billing of unnecessary services, misrepresenting dates of service, or providers of service, and paying kickbacks for patient referrals.

When a hospital or healthcare organization submits a fraudulent invoice to Medicare, it is essentially stealing from the American taxpayer and keeping the money for itself. Thus, for purposes of calculating the amount that has been defrauded from the federal government, each individual invoice submitted to Medicare constitutes a separate “false claim.” The False Claims Act allows the government to recover three times the amount of the false claims submitted, plus a penalty of $5,500 - $11,000 per claim.

The whistleblower is entitled to collect 15% - 30% of the total amount recovered by the federal government. Our whistleblower attorneys will negotiate with the government on your behalf to help maximize your reward.

In one Medicare whistleblower lawsuit, two former lab employees split a $3.7 million reward for exposing fraudulent Medicare billing practices at Diagnostic Laboratories and Radiology, a California-based mobile lab and x-ray provider. The company agreed to pay a total of $17.5 million to settle allegations that it violated federal and state laws by paying kickbacks for referrals of mobile lab and radiology services that were billed to Medicare and Medicaid. Diagnostic Labs allegedly took advantage of Medicare’s different reimbursement system for inpatient and outpatient services by charging Skilled Nursing Facilities (SNFs) discounted rates for inpatient services paid by Medicare in exchange for the facilities’ referral of outpatient business to Diagnostic Labs.


Medicare Fraud Involving the Pharmaceutical Industry

Medicare fraud can occur when pharmaceutical companies encourage doctors to prescribe drugs for uses that have not been approved by the Food and Drug Administration (FDA). This practice is known as misbranding. For example, if the FDA has approved a prescription drug to treat high blood pressure, but the drug company’s sales representatives promote the drug as being an effective way to treat obesity, the pharmaceutical company is misbranding the drug.

Misbranding is a form of fraud against the government. Each time Medicare, Medicaid, or other government healthcare program pays for a prescription for a use that has not been approved by the FDA, a false claim has been submitted to the federal government.

Pharmacies and Medicare Fraud

Medicare fraud has also been known to occur at pharmacies. For example, if a pharmacy provides patients with generic prescription drugs, but charges Medicare and Medicaid for the price for the brand name version of the drug, fraud has occurred. In one case, a pharmacy was found to have charged Medicare for the total number of eligible refills associated with a prescription, even though the patient never actually requested the prescription be refilled.

Furthermore, a pharmacy may be held liable in a whistleblower lawsuit if it is knowingly filling prescriptions that were written for no legitimate medical purpose. These types of Medicare fraud lawsuits often involve prescription pain killers or drugs that can be used to produce illegal narcotics.

In some instances, the owners of pharmacies have filed whistleblower lawsuits against drug companies that were offering kickbacks to prescribe certain drugs or promote drugs for off-label uses.

If you believe that Medicare fraud may be occurring at your workplace, it is important that you speak with an experienced whistleblower attorney. He or she will review the information that you have regarding the potential Medicare fraud and help you determine if a lawsuit should be filed. Your attorney can also protect you from retaliation and help you maintain your confidentiality during the whistleblowing process. For more information, please contact us today.