On October 31, 2014, the Department of Justice (DOJ) announced that one of the largest hospital systems in the country, Dignity Health (Dignity), agreed to pay the government $37 million to resolve allegations that it overcharged the government when it deliberately billed Medicare and TRICARE for unnecessary inpatient services. The government claims that Dignity violated the False Claims Act (FCA) and committed health care fraud when it continuously admitted patients into 13 of its hospitals facilities for medical treatment that could have been administered on an outpatient basis.  Former Dignity employee, Kathleen Hawkins, exposed Dignity’s alleged illegal practices in a lawsuit filed against Dignity under the qui tam whistleblowers provision of the FCA.  She will receive $6.25 million for reporting Dignity’s alleged illegal practices.

According the lawsuit filed on behalf of the government, Hawkins claimed that for a period of four years, between 2006 and 2010, Dignity, which is based in San Francisco and formerly known as Catholic Healthcare West, admitted patients into 13 of its hospitals for required elective surgery or other vital medical procedures. However, many of the patient’s medical diagnosis and treatment were not serious enough to warrant hospital stays.  In fact, the government’s investigation of Dignity’s ongoing questionable practices between 2000 and 2008, further uncovered alleged admittance of patients treated for elective procedures that were found to be minimally invasive.  Despite the knowledge that these practices were unlawful, Dignity’s hospitals repeatedly sought reimbursement from Medicare and TRICARE for the more costly inpatient stays, thereby increasing the hospitals revenue, while violating the FCA.  Although this settlement is not an admission of liability by Dignity hospitals, it is one of many examples that the government will do everything in its power to shield taxpayers from fraud on federally-funded healthcare programs.

When a company intentionally ignores laws designed to protect tax payers dollars, and takes advantage of government programs for financial gain, it not only depletes Medicare and TRICARE funds, which is part of the military health care program, but it also hurts the people these programs are designed to assist, including the elderly and military families and personnel.  However, to combat this type of fraud, provisions of the FCA allows any person, who knows of an individual or company that has financially defrauded the federal government, to file a “qui tam” lawsuit to recover damages on behalf of the government. Additionally, a whistleblower who files a case against a company that has committed fraud against the government, may receive an award of up to 30 percent of the settlement.

If you have information concerning a potential case involving Medicare or TRICARE billing fraud, you can help your fellow taxpayers by bringing that information to the attention of the government. It is possible that you might be able to bring your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the U.S. government. Before filing your lawsuit, be sure to consult with an attorney familiar with the intricacies of the False Claims Act and qui tam lawsuits, as these attorneys are best equipped to help protect your rights and help you gain your share of any monetary reward from a potential settlement.