Medicare Advantage Fraud: Misallocation

Medicare and Medicaid managed care organizations (MCOs), including Medicare Advantage plans, are paid monthly for managing the cost of providing medical services to Medicare and Medicaid beneficiaries.

Medicare and Medicaid managed care organizations (MCOs), including Medicare Advantage plans, are paid monthly for managing the cost of providing medical services to Medicare and Medicaid beneficiaries. This vested power comes with important restrictions and obligations. Most importantly, MCOs who discover material errors or omissions in claims or supporting documents that result in overpayments, or that erroneously decrease or avoid their obligation to pay or transmit money to the Government or to a state, are required to timely disclose those errors or omissions to Medicare or Medicaid. This includes specific profit limits, requiring MCOs to return excessive profits back to the Government. For example, relevant contractual language typically reads: “80 percent of the capitation paid to the plan shall be expended for the provision of designated health care services. In the event the plan expends less than 80 percent of the capitation, the difference shall be returned to the Government no later than May 1 of each year.”

Medicare Advantage Plans that turn a blind eye to their repayment or reporting obligations, or who wrongfully pocket overpayments of government funds, violate the Reverse False Claims Act provision, 31 U.S.C. 3729(a)(1) (2008) or 31 U.S.C. 3729(a)(1)(G)(2009). This statutory language specifically prohibits the wrongful retention of an overpayment, and it prohibits knowingly making, using, or causing to be made or used, “a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the Government.”

REAL PEOPLE making real change Medicare Fraud Wins

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.

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Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.

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Description
Description

“I collaborated with Nolan, Auerbach and White on a broad variety of cases where whistleblowers stepped forward to disclose tactics employed by large companies to influence physicians' medical decision-making in patient care. They and their medical consultants, have consistently leveraged biomedical research and best medical evidence to advance patient safety, optimize clinical outcomes, and control precious resource utilization.”

— Fred Polsky M.D.,, Former Medical Director, CMS Zone 7 Integrity Contractor

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