Blowing the Whistle Pays

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According to the Department of Justice (DOJ), the False Claims Act is the government’s most effective tool for rooting out fraud and returning misappropriated funds back to taxpayer-funded programs. The Act allows private citizens to be rewarded for being ”whistleblowers”—people who file civil lawsuits on behalf of the government in order to stop fraudulent behavior.

A story published by The Daily Record states that a former employee of a diagnostic-imaging company blew the whistle on the couple who owned it because they were submitting false claims to Medicare. (The complaint filed alleged that the two falsified thousands of diagnostic test reports and neurological tests conducted without proper physician supervision claiming more than $7.75 million in reimbursements from the government health care program.)

The two 53-year-old company owners previously pleaded guilty to charges of health care fraud. While their sentencing has been scheduled, the judge has ordered the couple and the two companies they own to pay back $5 million in damages and $2.75 million in civil monetary penalties and interest totaling $7,756,865.

The DOJ also states that in 2015, $1.9 billion out of a total of $3.5 billion funds recovered from False Claims Act cases came from companies and individuals in the health care industry who allegedly provided unnecessary or inadequate care, paid kickbacks or overbilled for goods and services paid by federal health care programs such as Medicare and Medicaid. As a reward for their assistance, whistleblowers can receive up to 30 percent of the recovered funds. In this case the unnamed whistleblower will receive up to 25 percent of the $7.7 million recovered, which could amount to more than $1.9 million. (I suppose that in this case, the losses of two fraudsters’ scheme gone bad were a whistleblowers gain.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, Rockaway Twp. Couple to pay $7.75 million to Medicare fraud case,” published by The Daily Record on July 12, 2016.

A Rockaway Township couple and their Parsippany-based diagnostic-imaging companies were ordered to pay more than $7.75 million for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests, according to U.S. Attorney for New Jersey Paul J. Fishman.

Judge Stanley R. Chesler, sitting in Newark federal court, also found Nita K. Patel, 53, and Kirtish N. Patel, 53, liable for knowingly submitting false claims for neurological tests conducted without physician supervision.

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Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.