Medicare Kickbacks a Common Form of Healthcare Fraud

This video features Jason T. Brown, an Employment and Labor Law attorney based in New Jersey.

Whistleblower Attorney Helps Witnesses Expose Fraud Confidentially

Video Transcript:

Judy Maggio: 

You have to ask yourself, if your healthcare provider won a free trip to the Bahamas for every time they prescribed a certain product, 100 times, would you have confidence in the healthcare provider, and the answer is no.

Jason Brown: 

How common are kick-backs when it comes to Medicare, Are they illegal and what's being done about them? We'll find out today in this episode of Ask the lawyers. Hi everybody, I'm Judy Maggio with askthelawyers.com, and my guest today is attorney and former FBI agent Jason Brown. But I do wanna remind you first, if you wanna ask Jason any questions on your own, it's very easy, just go to the top of the askthelawyers.com page and click on that button that says, Ask a Lawyer, or simply call the number you'll see on your screen during our conversation. Thanks so much for joining us today, Jason.

Judy Maggio: 

Well, thank you very much for having me.

Jason Brown: 

First question, what is considered a kick-back in the Medicare space? And is it illegal?

Judy Maggio: 

A kickback is a permutation of pay-to-play, and I can tell you from being a former FBI Special Agent and legal advisor, that if you engage in kickbacks, the federal government will kick back at you both civilly and potentially criminally, a kickback is when you offer some sort of financial inducement to steer a patient to a healthcare provider in the Medicare space, and it questions the reasonability of a medical judgment by doing that, you're financially incentivizing an individual to steer them in that direction, and it may not be in the best interest of the patient. Each year, hundreds of millions of dollars actually go to whistleblowers who blow the whistle about these illegal kickback schemes, and in 2021, my firm was fortunate to be part of a breaking down a kickback scheme that resulted in 140 million dollar judgment against a bad actor who engage in unscrupulous endless kickbacks.

Jason Brown: 

Tell us more about this Anti-Kickback Statute and the Stark law and why they're so important.

Judy Maggio: 

Well, they're both components of the False Claims Act, the False Claims Act is an old law, the Lincoln Law, which enables an ordinary citizen to blow the whistle against illegal conduct in the context of their healthcare provider that they're working for and obtain a portion of the recovery. They're distinguished slightly, where the AKS, Anti-kickback statute involves third party steering business to the healthcare providers entity versus the Stark law, which subtly steers patients to derivative businesses that the healthcare provider owns without disclosing the possible conflict of interest.

Jason Brown: 

Let's get more into specifics. What are some examples of these issues that you've seen in your practice?

Judy Maggio: 

Well, we've seen some pretty horrific examples in our practice, one of which is a doctor implanting cardiac devices just for the incentive awards tied into them. We've seen illegal runners quite frequently being used. With illegal runners, we've had doctors who really treasure trove the homeless shelters, and would take bus-loads of homeless people to their medical practice, and they didn't view the individuals as people, they viewed them as dollar signs, it's sanctimonious for an individual or healthcare provider to think, Hey, I'm giving these people healthcare service and providing a service that they ordinarily wouldn't get, but they go beyond that. What they do is giving them services they don't need, and the tax payer bears the brunt, and it can create possible patient harm. Part of this is what fuels the entire opioid epidemic in the United States, where we've had cases in the past, and they're a matter of public record now, where they took homeless people, they would give them free trips to the gambling casino, but along the way, get them hooked on opioids so they'd have to come back every week. Speaking of opioids, another big thing in the kickback provision is with the pharmaceutical companies, a lot of times pharmaceutical companies will provide incentives to healthcare providers to prescribe their particular product, it could be very subtle things, such as a free trip for a speaking engagement...

Judy Maggio: 

When there's no actual audience listening to that presentation, or it could be some sort of other rebate or direct payment type of scheme, but you have to ask yourself if your healthcare provider won a free trip to the Bahamas for every time they prescribed a certain product a 100 times, would you have confidence in the health care provider? And the answer is no, and that's the whole root of the anti-kickback statute and the Stark law, there's an appearance of a conflict, if not an actual conflict, by engaging in this type of behaviour.

Jason Brown: 

Some of these examples are really troubling, I wanna know about the penalties involved, are they heavy?

Judy Maggio: 

They're significant, and the penalties could be one of two different routes, first of all, the penalties under the False Claims Act have been raised for this fiscal year to a minimum of $12,000 per instance, up to $24,000 per instance. Plus, you also have triple damages and attorney fees and costs, so you're looking at some pretty astronomical numbers when you really look at the volume that people who violate the law actually engage in with these type of kickbacks. I use one example of one of our cases from last year that resulted in 140 million dollar type of judgment against the defendants, and the nature of whistleblower litigation is, it's confidential and under seal, I could tell you we have under seal probably another couple of hundred million dollars worth of litigation involving illegal kickback schemes that are all across the country, some of them in a just a blatant way, and some of them in a more subtle way.

Jason Brown: 

Jason, in your experience, who typically reports these types of kickbacks?

Judy Maggio: 

Well, anybody can report them. From my experience, those that are successful in the Whistleblower space are individuals inside the medical practice who have some degree of consciousness of what's going on, and when I'm saying degree of consciousness that's critical because some of this wrongful conduct is so incestuous in certain parts of the nation that when you speak with individuals within the practice, they'll be like, Yeah, we pay to get our Medicare patients, but everybody's doing it around here, so they don't even think what's going on is illegal, but yet when you start talking to them and illuminating, not just what's going on but the consequences potentially to everybody involved, there's this aha moment where they realise, number one, the conduct is wrong, and number two, they could be a whistleblower and they stand for doing the right thing to gain maybe up to 30% of what the government recovers. So that's a large reward for doing what's the right thing at the end of the day.

Jason Brown: 

So final question, what would you tell someone who thinks his or her employer is engaging in this type of behaviour?

Judy Maggio: 

I would say you should consult a law firm that really has a focus on this type of litigation, and there's only a real handful of firms across the country, I'm proud to say mine's one of them, but that is engaged and successfully has litigated this type of litigation. You don't go to a mom and pop shop for this, you go to somebody who's got a track record of experience, somebody that can seamlessly interface with the Federal Government, of course I lean heavily on my former background as a former Department of Justice FBI Special Agent. There's other quality firms out there, but you really should take advantage of a free confidential consultation and ask the right questions of your potential attorney and law firm. Have they ever litigated something like that before, what have been their results, and the choice of an attorney is an important one. Definitely educate yourself about the subject matter, speak with the attorney, make the right decision, and the longer you sit, the worse off you are because there's two potential negative consequences to it, first of all, there's something called the first to file rule under the false claims act.

Judy Maggio: 

So if you're the second to file, you may not be entitled to a penny from filing that lawsuit, and second, from being part of the government and understanding how the government thinks about these things, the longer you're part of a fraud, the more likely it is that the government may think you're part of the problem, so you better be part of the solution at the end of the day and blow the whistle the right way.

Jason Brown: 

Such important information today. Thanks so much for helping us out, Jason.

Judy Maggio: 

Thank you again for having me.

Jason Brown: 

That'll do it for this episode of askthelawyers.com. My guest has been New Jersey Attorney and former FBI agent, Jason Brown. Another reminder, if you wanna ask Jason a question, simply go to the top of the askthelawyers.com page and click on that button that says Ask a Lawyer. It's quite simple to do. Thanks so much for watching. I'm Judy Maggio with Ask the Lawyers.

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