Health Care Fraud Hurts the Delivery of Health Services again

By Thomas R. Grande

HONOLULU – Thomas Grande of Davis Levin Livingston ‘ is an attorney who concentrates in representing whistleblowers, qui tam relators and consumers in construction and other class actions. Information provided by his client resulted in the highest Medicare fraud settlement in Hawaii history.

In the aftermath of the recent record $3.4 million settlement by the United States with Kapiolani Health for Medicare billing violations, several commentators stated that the false billing did not affect the quality or delivery of health care services. In other words, the only damage which resulted from the false billings was money being improperly taken from the financially-strapped Medicare program.

In fact, nothing could be further from the truth. Everyone pays the price for health care fraud: patients who pay more in premiums, copayments and contributions for health insurance and medical services; businesses who are compelled to pay increasing amounts to provide health care to their employees; and taxpayers who pay more to cover health care expenditures in public health plans, such as Medicare and Medicaid. The costs of increased health care are coming directly from our pockets – we are subsidizing the part of the health care industry which fraudulently bills for services.

Americans pay about $ 1 trillion in health care costs per year. According to the United States General Accounting Office, 10 percent of what we spend on health care is fraudulently billed in services not rendered, overcharges, duplicate charges and other health fraud schemes. That means that $100 billion per year is fraudulently billed!

How much health care can be delivered for $100 billion?

• $100 billion would give every man, woman and child in the United States and Canada a complete health examination and physical.
• $100 billion would pay for 20 million days in an intensive care unit at a hospital.
• $100 billion would pay for 40 million CT scans.

How does higher health costs translate into lower patient care? Plainly, if there is not enough money to pay for appropriate patient care, the quality of the health service delivered will go down – if there is not enough money to pay for the service in the future the services will not be provided, particularly to those who can not afford private insurance.
Inflated and false billings also serve to directly diminish the quality of health care which is delivered – Patients are paying more than necessary to receive health services.

The case which was filed against Kapiolani Home Health and Kapiolani Extended Care was brought to light by a nurse-a “whistleblower” or “relator,” who came forward because she believed that patients are harmed if Medicare is being improperly billed for home health services. Although she was not aware of the statute when she retained me to work on her case, her complaints resulted in the filing of a Federal False Claims Act (qui tam) lawsuit to disclose to the United States and State of Hawaii Medicare compliance officials that false claims were being submitted by Kapiolani for Medicare charges.

Increasingly, qui tam cases are a major factor in deterring and preventing health care fraud . Since 1986, the United States has recovered about $1.3 billion in qui tam cases. Approximately one-quarter of this was recovered in health care fraud qui tam cases.

Qui tam cases involve all health care providers: hospitals, physicians, medical equipment suppliers, clinics, ambulance companies, clinical laboratories, universities, billing services, therapists, home health care providers and nursing homes. The lawsuits are generally brought by employees, doctors, nurses, researchers, subcontractors, even competitors.

In 1996, the United States recovered almost $275 million in fines against health care providers. Almost half of that sum was a direct result of qui tam relators coming forward with information about health care fraud.

Health care fraud hurts everyone. It should be reported, thoroughly investigated and soundly eliminated. The future of our health care system, particularly our Medicare system, depends on ordinary citizens stepping forward to get rid of the fraud in health delivery.

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