Knowledge base

Who Can be a Defendant

Congress intended for the False Claims Act to be read broadly, so the Government could reach all fraud schemes that potentially impact the public fisc. In turn, the courts have placed few limits on who falls under the ambit of the False Claims Act, allowing the government to effectively reach all who seek to illegally drain government funds. The False Claims Act and its qui tam provisions have proven especially effective against dishonest healthcare providers and companies that target limited government healthcare dollars. In fact, since 1986, these powerful fraud-fighting weapons have been used to recover over $26 billion in ill-gotten gains from some of the largest and most profitable companies in the healthcare sector.

At first glance, Medicare fraud and other healthcare fraud schemes appear varied and individually crafted. Upon closer inspection, it becomes readily apparent that wrongdoers tend to employ the same basic fraud schemes. The following list identifies some of the common fraud schemes utilized by providers and companies in the healthcare industry.

FDA Regulated Manufacturers

1. Pharmaceutical Manufacturer Fraud

  • Reporting inflated pharmaceutical prices to Medicare
  • Overstating the efficacy to drive off-label sales
  • Paying kickbacks to providers
  • Knowingly violating FDA specifications for manufacturing


2. Medical Device Manufacturer Fraud

  • Using post-market studies and device registries as vehicles to pay illegal kickbacks
  • Marketing medical devices even though the use has not been approved by the FDA
  • Manufacturing unapproved medical devices
  • Knowingly violating FDA specifications for manufacturing


3. Biotechnology Manufacturer Fraud

  • Providing unlawful kickback payments to surgeons
  • Reporting inflated pharmaceutical prices to Medicare
  • Overstating the efficacy to drive off-label sales
  • Knowingly violating FDA specifications for manufacturing
  • Managed Care Companies


4. Medicare Advantage Company Fraud

  • Signing letters of agreement with health care providers for service or product discounts and then failing to give Government Health Care Programs the benefit of the negotiated discounts
  • Misleading customers about the scope of the Medicare Part C coverage plans
  • Deliberately avoiding insuring late-term pregnant women and other potential insureds with a high health-risk status


5. Medicaid Managed Care Plan Fraud

  • Failing to process or pay providers’ health claims in a timely fashion
  • Failing to apply a market price adjustment


6. Health Maintenance Organization Fraud

  • Refusing to insure late-term pregnant women and other people with a high health-risk status
  • Failing to report coordination of benefits (COB) recoveries and overpayments received from third-party health care providers
  • Retail Level Pharmaceutical Providers


7. Prescription Drug Plan Provider Fraud

  • Falsely classifying patients as dually eligible for Medicare and Medicaid
  • Altering or discarding documents that would disclose errors
  • Rigging purportedly random samples of files


8. Pharmacy Benefit Manager Fraud

  • Performing cursory and inadequate audits
  • Retaining overpayments
  • Falsifying data submitted to Government Health Care Programs


9. Specialty Pharmacy Fraud

  • Reporting inflated drug prices
  • Reselling returned drugs
  • Submitting false reports about prescription filling time


10. Retail Pharmacy Fraud

  • Submitting duplicate claims to the respective federal and state health care programs for patients who were dually-eligible for Medicare Part D and Medicaid
  • Systematically failing to dispense drugs to Government Health Care beneficiaries


11. Long-Term Care Pharmacy Fraud

  • Overcharging government programs as compared to private health insurers
  • Illegal paying kickbacks in exchange for Medicare and Medicaid referrals


12. Copayment Patient Assistance Charity Fraud

  • Acting as an illegal conduit to funnel funds from pharmaceutical companies to Government Health Care Program beneficiaries
  • For-profit ventures improperly disguised as bona fide charitable organizations
  • Offering inducements or kickbacks to patients and providers to keep patients on certain drugs


Hospital and other Systems


13. Hospital Fraud

  • Misclassifying patients as inpatients when they were more appropriately classified as outpatients
  • Improperly structuring physician recruitment agreements
  • Ordering medically unnecessary overnight admissions


14. Hospital Management Company Fraud

  • Including unallowable costs in Medicare cost reports
  • Receiving reimbursements for health care services that were not provided
  • Billing take-home drugs as infusions


15. Academic Medical Center Fraud

  • Submitting false grant progress reports
  • Withholding critical information in applying for government grants
  • Improperly billing government agencies while receiving a non-governmental research grant for the same procedure


16. Hospice Provider Fraud

  • Providing hospice care to Medicare beneficiaries who were not eligible for hospice benefits under the Medicare regulations
  • Providing hospice care without obtaining the required written certifications of terminal illness
  • Misrepresenting the purpose of Medicare’s coverage of hospice services to patients and their families in order to continue to keep them admitted for hospice care


17. Home Healthcare Provider Fraud

  • Including Medicare-covered visits and non-covered visits in calculations of the average cost of home health care visits
  • Billing for fees which result in profit when there is a controlling relationship


18. Skilled Nursing Home Facility Fraud

  • Overcharging Medicare for reimbursement of car mileage
  • Billing Medicare for medically unnecessary supplies
  • Submitting claims for partial hospitalization of patients who suffer from dementia and other symptoms of Alzheimer’s disease, even though such patients do not benefit from that type of treatment


19. Long-Term Acute Care Provider Fraud

  • Submitting claims for services not provided
  • Paying illegal kickbacks in exchange for Medicare and Medicaid referrals


20. Inpatient Rehabilitation Facility Fraud

  • Billing Medicare for unnecessary treatments
  • Admitting patients whose medical conditions do not warrant inpatient rehabilitation or who will not benefit from the rehabilitation on account of their conditions


21. Health Care Consulting Company Fraud

  • Advising hospitals to falsely inflate charges
  • Helping providers to conceal illegal Medicare billing practices


Diagnostic, Clinical, and Other Laboratories


22. Independent Diagnostic Testing Facility Fraud

  • Paying kickbacks to providers to induce them to refer Medicare business
  • Ordering improper drug screens


23. Clinical Laboratory Fraud

  • Performing medically unnecessary blood tests
  • Improperly charging tests
  • Unbundling a single series of blood tests into separate tests to receive higher reimbursements


24. Drug Testing Company Fraud

  • Billing the Government for unnecessary analyses
  • Systematically charging the Government higher prices than those charged for private patients


25. Diagnostic Laboratory Fraud

  • Improperly charging tests
  • Performing medically unnecessary blood tests


26. Pathology Laboratory Fraud

  • Billing the Government for unnecessary analyses
  • Charging the Government higher prices than those charged for private patients


DME Providers

27. DME Supplier Fraud

  • Repeatedly filing claims for equipment that is never actually provided
  • Failing to pass through discounts to the Medicare program
  • Using or causing falsified documents to support claims of medical necessity


28. Home Infusion Service Provider Fraud

  • Charging Medicare for each day a patient used a portable pump instead of billing only for the day the pump was installed by a physician
  • Billing for self-administered home infusion therapy as outpatient hospital services


Skilled Therapy Providers

29. Outpatient Rehabilitation Facility Fraud

  • Double billing Medicare for costs associated with the delivery of physical, occupational and speech therapy services


30. Occupational Therapy Facility Fraud

  • Upcoding and double billing Medicare for costs associated with the delivery of occupational therapy services


Various Outpatient Providers

31. Medical Transportation Company Fraud

  • Billing Medicare for non-reimbursable items
  • Submitting claims for non-emergency ambulance transportation that is not medically necessary or lacks valid documentation of medical necessity


32. Psychiatric Treatment Facility Fraud

  • Providing substandard psychiatric counseling and treatment in violation of Medicaid requirements
  • Falsifying the attendance rosters of outpatient psychiatric group meetings
  • Billing the Government for a higher level of service than actually provided


33. Outpatient Surgery Center Fraud

  • Improperly increasing charges for Medicare patients
  • Systematically upcoding bills and charges


34. Outpatient Radiology Center Fraud

  • Billing Medicare for ultrasound procedures, reconstruction procedures, and MRI’s not ordered by the patients’ treating physicians


35. Outpatient Infusion Clinic Fraud

  • Falsifying documents to categorize patients as inpatient rather than outpatient
  • Improperly billing for self-administered medications


36. Sleep Disorder Clinic Fraud

  • Misclassifying patients as inpatients when they were more appropriately classified as outpatients


Miscellaneous Healthcare Providers

37. Medicare Administrative Contractor Fraud

  • Falsifying audit activity dates
  • Submitting false information regarding the accuracy and timeliness of processed claims
  • Knowingly failing to recover money owed to the Government


38. University Research Facility Fraud

  • Submitting  false grant progress reports
  • Billing government healthcare programs while receiving a research grant for the same procedure


39. Group Purchasing Organization Fraud

  • Requiring improper payments and fees from manufacturers

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