Healthcare Fraud in Medicare with Ileana Hernandez of Manatt

All across America, patients and doctors are getting caught in the crosshairs of Medicare fraud, and no one is immune. Unfortunately, whether you’re a patient, a physician, or even an office manager, you might find yourself in prison sooner than later if you try to defraud Medicare.

Ileana Hernandez of Manatt discussed the growing issue of Medicare fraud. Hernandez, who works for one of America’s premier law firms focused on healthcare litigation, talked about how people try to defraud Medicare and some of the pitfalls they might face if they’re caught.

Hernandez noted that there is a lot of money in Medicare and that it’s become a target for criminals. “It seems like every week we’re reading about another doctor who has been caught in some sort of fraud,” she said.

The most common way people try to defraud Medicare is by billing for procedures they didn’t actually do. Hernandez noted, however, that it’s not always easy to get away with.

“If someone is caught billing for something they didn’t do, there can be consequences,” she said. “They will be subject to the False Claims Act (FCA), which has qui tam provisions.” Qui tam refers to an action brought by a private party on behalf of the government.

Hernandez noted that the FCA lets whistleblowers bring lawsuits against companies or individuals defrauding government programs like Medicare. If the whistleblower wins, they get an award-usually 15 to 20 percent of whatever is recouped by the federal government.

“The number of qui tam cases has grown significantly in recent years,” said Hernandez. “Healthcare providers need to make sure they’re complying with the law, and it’s not just about billing.”

There are other ways health care companies try to defraud Medicare beyond billing for procedures that didn’t happen. For example, many hospitals don’t like to turn away patients because they get lower payments if their patient load is higher. As a result, many hospitals will admit patients who aren’t sick enough to require hospitalization.

Hernandez called this practice “upcoding,” noting that the providers use it, so they don’t have to turn away patients and risk having their patient load numbers go down. This is only one of many tricks people use to defraud Medicare, but the government is well aware of all these tactics.

For example, when providers sign up with Medicare’s enrollment system, they must make sure the information they give the federal government is accurate. If it’s not, Hernandez said that could be considered fraud, and there are dire consequences.

“If you’re caught lying about your identity or purposefully making false statements about your company, you can be excluded from Medicare for ten years,” said Hernandez. “When it comes to providers, I’d say the most important thing is to ensure whatever information they provide Medicare is accurate.”

There are other consequences providers can face aside from exclusion if they’re caught defrauding government programs like Medicare. For example, Hernandez said some providers are being charged under the FCA for upcoding or making mistakes on claims. If they’re convicted, some are facing hefty fines and prison sentences.

“Depending on the type of fraud involved, people who work at hospitals or other healthcare facilities can also be subject to criminal charges,” she said. “If you’re an executive or CFO of a company, there are certain rules you have to follow. So it’s important for everyone involved in healthcare to make sure they stay on the right side of the law.”

Hernandez concluded by noting that some hospitals are also being investigated for other types of fraud beyond upcoding, such as kickbacks. For example, hospitals might pay physicians to use their facilities or offer free samples of drugs for them to prescribe. Although the sample drugs are supposed to be paid for by the company making them, some hospitals don’t bill them as such and end up pocketing the money themselves.