Healthcare Fraud


1. Why is Healthcare Fraud the largest area for False Claims Act recoveries?

Unfortunately for the American taxpayers it is the same answer as the one Willie Sutton gave when he was asked, “Why do you rob banks?” and he replied, “Because that is where the money is.” Healthcare programs make up over half of all federal spending. That translates into almost $1trillion annually. And, that doesn’t include state and local government spending.

2. Is there a difference between Medicare and Medicaid Healthcare Fraud cases?

Medicare is a 100% federal healthcare insurance program. Medicaid is a mix of federal, state and sometimes local money and administrative resources. A relator is always potentially entitled to a share of any federal monies recovered; in some states that do not have comparable false claims acts, the relator may not be able to share in those states’ recoveries.

Confidential Contact Form

My e-mail address:


3. Which federal agency oversees Healthcare Fraud Cases?

The Department of Health and Human Services, acting through the Centers for Medicare & Medicaid Services (CMS) promulgates healthcare regulations and oversees federal healthcare fraud matters. Healthcare fraud lawsuits are handled by Assistant U.S. Attorneys at various U.S. Attorneys’ Offices throughout the country and Trial Attorneys from the Department of Justice in Washington, D.C.

4. Who investigates False Claims Act allegations of Healthcare Fraud?

For Medicare cases, it is usually Special Agents from Department of Health and Human Services, Office of Inspector General (OIG) and sometimes analysts from the U.S. Attorneys’ Offices or Department of Justice. Occasionally, other federal investigative agencies, such as the FBI, also get involved. For Medicaid cases, it can be the foregoing personnel and/or investigators, agents or analysts from the Medicaid Fraud Control Units (MFCUs) of the affected states.

Qui Tam Contact

5. What is a Corporate Integrity Agreement (CIA)?

Frequently as part of a civil settlement the OIG will require a healthcare provider to sign a written contract which provides that for a period of time (typically 5 years), the provider will fulfill certain compliance and oversight obligations to help ensure no on-going or future healthcare fraud violations.

6. What does NAMFCU stand for?

NAMFCU is the acronym for the National Association of Medicaid Fraud Control Units. It is a professional association created to provide training, promote communication and interstate cooperation, provide for the exchange of information, and educate the public about the work of the Medicaid Fraud Control Unit (MFCU) program. NAMFCU often coordinates Medicaid fraud investigations and settlements when the alleged healthcare fraud activity covers multiple states.

7. How does the concept of “materiality” come into play in these kinds of cases?

Materiality is a legal concept. In False Claims Act litigation a relator must establish that the defendant’s false or fraudulent statements were material to the claims payment process, meaning they had “a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.” 31 U.S.C. § 3729(b)(4). As a practical matter, this usually means that CMS representatives must agree the misconduct you are alleging was important enough to that agency to affect its reimbursement decisions. If CMS does not agree, it is highly unlikely that the Government attorneys at the U.S. Attorney’s Office and/or Department of Justice will be willing to intervene in the case. Additionally, it will often be difficult to win the case on your own if CMS says, in effect, “Notwithstanding the alleged misconduct, we would have paid the money anyway.” Believe it or not, this is not an uncommon problem in healthcare fraud cases. That is why it is important to make the most effective presentation of your case to the Government at the outset.

8. Other than “materiality” are there other defenses that can jeopardize healthcare fraud cases?

There are at least two other things to be wary of. First, you don’t want to base a case solely on expert testimony (often involving lack of medical necessity) in close calls where the defendant is going to have another expert testify to just the opposite. Second, if possible you want to avoid a case where there are unclear CMS rules, regulations and policies or ones that have changed radically overtime.

9. How about linking allegations of medical malpractice with False Claims Act litigation?

Usually you don’t want to focus on medical malpractice in False Claims Act cases. Medical malpractice is a state law matter and one that does not necessarily involve false or fraudulent billing per se. However, there may be instances involving such widespread, pervasive and systemic provision of substandard care that one can successfully argue that the submission of claims for healthcare reimburse are false or fraudulent because they expressly or impliedly represent that the care was provided at an appropriate level when it wasn’t.

10. Is reducing Healthcare Fraud important to the federal Government?

CMS recognizes that, “Healthcare fraud perpetrators steal billions of dollars each year from Federal and State governments, providers, private insurance companies, American taxpayers and some of our most vulnerable citizens. Fraud, waste and abuse drive up costs for everyone in the healthcare system, in addition to hurting the long term solvency of the Federal healthcare programs upon which millions of Americans depend.” As a result, the Government has implemented a number of initiatives, such as the creation of the Healthcare Fraud Prevention and Enforcement Action Team (HEAT), to reduce its impact as much as possible. However, qui tam litigation under the False Claims Act remains the most effective anti-fraud tool.


Show Comments