Earlier this year, six medical offices and surgery centers agreed to pay approximately $7.5 million to resolve allegations that they violated the False Claims Act[1] by billing federal programs for acupuncture procedures which were not reimbursable by the federal government. Further allegations included that defendants to the action provided incorrect billing codes when submitting claims for those procedures in order to ensure payment. In response to these allegations, defendants contended that they relied on misrepresentations pertaining to billing and coding made by the manufacturers and their marketers.
Manufacturer utilization of marketers to promote products is not at all uncommon. However, marketer messaging may be confusing for unwitting clinicians where marketers, who are oftentimes not clinicians, fail to fully appreciate the clinical and billing implications of the products they are promoting. This risk is exacerbated where marketers are often paid based on their sales, further encouraging potential misinformation or misleading information to be communicated. Clinicians, believing they are acting compliantly, may find themselves submitting false claims as a result of relying on marketers’ messaging.
Notably, this suit was filed by former employees of the defendant medical offices through a qui tam action,[2] which is an action filed by a private citizen on behalf of the government alleging a violation of the False Claims Act. The False Claims Act – via its qui tam provisions – is an especially powerful tool within the Government’s arsenal as it not only permits, but financially incentivizes, private individuals (e.g., employees) to blow the whistle on entities and individuals they believe to be engaging in specific types of misconduct.
As demonstrated above, the stakes only increase when all players in any given healthcare setting have the potential (and incentive) to blow the whistle, which highlights the importance of prospective compliance and dynamically vetting claims of non-clinicians (and clinicians alike) before engaging in any conduct which may result in exposure to the clinician or her broader practice.
At Frier Levitt, our attorneys specialize in all facets of navigating the complexities of the healthcare landscape, including those relating to prospective compliance. Our attorneys have the industry knowledge to assist you in developing or supplementing your compliance program and standard operating procedures to avoid engaging in conduct which may result in liability. Contact Frier Levitt today.
[1] The False Claims Act is a federal statute which prohibits knowingly submitting, or causing to be submitted, false or fraudulent claims to the Government.
[2] Under the False Claims Act’s qui tam provisions, private citizens (“relators”) may bring an action in the name of the United States alleging a violation of the False Claims. Relators are financially rewarded for the time, expense, and risk of bringing the alleged fraud to the Government’s attention and, as a result, are permitted to share in between 15 to 30 percent of the government’s recovery, depending on a number of factors, including the significance of Relator’s information, her role in advancing the case, and whether the Government intervenes.
