- News
- News
- News
- By Mary Inman, Esq.
A recent federal court decision coming out of New Jersey demonstrates the viability of an unusual kind of whistleblower: a privately defrauded party.
The most common prototype of a whistleblower under theFalse Claims Act(FCA) is a corporate insider who sees fraud committed against the government by their employer or a company they work with, and generally after many, many attempts at internal reporting, sues the company under the law and is eligible to share in the recovery.
But there’s little restriction on who can be a whistleblower, and many individuals and entities besides employees of an unscrupulous contractor have occasion to uncover fraud. A recent case brought by Allstate, the large national insurance company, demonstrates an interesting way healthcare companies can utilize the FCA.
In that case, United States ex re. Allstate Insurance Comp. v. Phoenix Toxicology, No. 22-6303 (D.N.J.), Allstate accused a toxicology lab of billing the government for medically unnecessary urinary drug tests – or for types of tests that were more complicated (and expensive) than what was warranted.According to publicly available data analyzed by Allstate, the lab billed the government roughly $4 million for these tests.
Allstate is, of course, not an insider to or an employee of Phoenix Toxicology. Instead, the insurer had its own litigation with the lab, alleging that it paid for medically unnecessary urinary drug tests, and then filed this FCA case because of what it learned in that commercial case.Allstate’s commercial litigation concerned an extremely similar fraud scheme, but with Allstate as the allegedly defrauded payor, instead of the government. That case settled in 2021.
Allstate used knowledge gained from allegedly being a fraud victim and facts gained from litigating that suit to file this case in the name of the government. Phoenix, in fact, filed a motion to dismiss wherein it argued that Allstate “impermissibly extrapolate[d]” the fraud from its commercial case and did not make a plausible inference that Phoenix defrauded the United States.
The court disagreed with Phoenix. In denying its motion, the Court acknowledged the genesis of the FCA case, but still found that Allstate brought forward nonpublic allegations that formed a “reliable indicia” of fraud against the government.
Commercial litigation in the healthcare industry is incredibly common, with thousands of suits filed annually. This decision highlights an alternative path to recovery for plaintiffs who may know of fraud in the healthcare industry against a private payor and then use knowledge of it to assess whether there may have been fraud against the government – and the basis for an FCA suit.
Plaintiffs in commercial disputes can learn all sorts of information relevant to an FCA scheme, like a provider’s coding and billing practices, the software applications they use, and the state of mind of decision-makers at the company.
All of that can potentially become evidence in an FCA suit. It will be interesting to see if other commercial plaintiffs are buoyed by this decision and file similar suits; it could create an interesting trend, and perhaps change what we think of as a prototypical whistleblower.
- TAGS: Billing, False Claims Act, Government, Healthcare
Mary Inman is a partner and co-founder of Whistleblower Partners LLP, a law firm dedicated to representing whistleblowers under the various U.S. whistleblower reward programs. Mary and her colleagues have pioneered a series of successful whistleblower cases against prominent health insurers, hospitals, provider groups, and vendors under the False Claims Act alleging manipulation of the risk scores of Medicare Advantage patients. Mary is a recognized expert and frequent author, commentator, and speaker on frauds in the healthcare industry, particularly those exposed by whistleblowers. Mary is a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.
PrevPreviousAMA Becoming Passe – And the Recurring Nightmare of Prior Authorization
NextHealthcare Funding Instability Prevents Serving the Already UnderservedNext
Related Stories
Proposed Updates to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for CY 2025
Tiffany Ferguson, LMSW, CMAC, ACMJuly 1, 2024
On June 27, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update payment rates and policies for renal dialysis services
Read More
Clinical Documentation Integrity Programs in the Spotlight
Glenn Krauss, RHIA, BBA, CCS, CCS-P, CPUR, CCDS, C-CDI, PCS, FCJune 24, 2024
All hospitals are struggling to some degree, with increasing payer denials and ongoing post-payment chart reviews resulting in a time-consuming process. According to a recent
Read More
Leave a Reply
Please log in to your account to comment on this article.
Featured Webcasts
The Inpatient Admission Order: Master the Who, When, and How
During this webcast Dr. Ronald Hirsch delves into the inpatient admission order process including when to get it, when it becomes effective, its impact on billing and payment, who can write it, how to cancel it, the effects on the beneficiary, and more. You’ll leave with a clear understanding of inpatient orders and guidelines for handling improper orders that you can implement immediately.
June 20, 2024
Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks
Michelle Wieczorek explores challenges, strategies, and best practices to AI implementation and ongoing monitoring in the middle revenue cycle through real-world use cases. She addresses critical issues such as the validation of AI algorithms, the importance of human validation in machine learning, and the delineation of responsibilities between buyers and vendors.
May 21, 2024
Leveraging the CERT: A New Coding and Billing Risk Assessment Plan
Frank Cohen shows you how to leverage the Comprehensive Error Rate Testing Program (CERT) to create your own internal coding and billing risk assessment plan, including granular identification of risk areas and prioritizing audit tasks and functions resulting in decreased claim submission errors, reduced risk of audit-related damages, and a smoother, more efficient reimbursem*nt process from Medicare.
April 9, 2024
2024 Observation Services Billing: How to Get It Right
Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.
March 21, 2024
Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies
Optimize your inpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. Participants will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.
June 26, 2024
Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance
Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P., as she helps you navigate advanced inpatient CDI technologies, regulatory changes, and system interoperability. Angela will provide actionable strategies for integrating AI and predictive analytics into CDI practices, ensuring seamless system interoperability, and maintaining compliance with evolving regulations. Attendees will learn to select and implement advanced EHR systems and CDI software, leverage data analytics to enhance documentation accuracy, and stay audit-ready with the latest compliance updates. Real-world case studies and practical tools will empower you to drive continuous improvement in CDI, improve patient outcomes, and enhance organizational efficiency. Don’t miss this opportunity to advance your CDI practices and stay ahead in this dynamic field.
July 11, 2024
Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance
Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P, for an insightful webcast on improving inpatient clinical documentation integrity (CDI). Inaccurate documentation can lead to misdiagnosis, improper treatment, and compromised patient safety. High workloads, lack of standardized practices, and outdated EHR systems contribute to these issues, affecting care quality and financial outcomes. Angela will offer practical strategies and tools to enhance accuracy, consistency, and timeliness in documentation. Attendees will learn to use standardized templates, checklists, and advanced EHR systems, while staying compliant with regulations. Improve patient care, ensure accurate billing, and reduce audit risks with actionable insights from this essential webcast.
June 26, 2024
Mastering E/M Coding: Navigating the Evolving Landscape
Join industry expert, Kathy Pride, RHIT, CPC, CPMA, CCS-P, for an in-depth exploration of Evaluation and Management (E/M) coding, tailored for healthcare professionals navigating recent guideline changes. Dive into advanced topics beyond mere code selection, including shared visits, criteria for selecting E/M levels, and documentation best practices. Gain clarity on complex guideline terminology and ensure compliance with regulatory standards. This comprehensive session is essential for coders, auditors, educators, and practitioners seeking to enhance their proficiency in E/M coding and maximize revenue capture.
June 19, 2024
