Healogics Settles Medicare Fraud Case Filed by Qui Tam Whistleblowers

Florida-based medical services company Healogics paid up to $22 million to settled a False Claims Act (FCA) allegations of Medicare fraud, the Department of Justice (DOJ) announced on June 20, 2018. The False Claims Act, is a law that imposes penalties on people and companies that knowingly defraud the United States. The qui tam provisions of the FCA, permits individuals to file False Claims Act lawsuits on behalf of the United States, and are entitled to a part of any recovered damages (often 15-25 percent).

There were two qui tam whistleblower suits from which this case originated, one brought by three former employees and one by a former executive, both allege that Healogics over-billed Medicare for unnecessary and sometimes unfulfilled testing, and inflated costs.

This case illuminates the importance of the qui tam provision, providing whistleblower awards and incentives for employees and people with knowledge of fraud to report instead of turning a blind eye. The U.S. is simply outgunned when it comes to fraud, as companies have the money and motivation to seek new ways of getting around the law and inflating profits. The Justice Department recovered over $4.7 billion from False Claims Act cases in 2016, and a whopping $2.4 billion from healthcare-related cases alone in 2017, the 8th straight year that health care payouts have topped $2 billion.

Due to the size and complexity of public healthcare in America, there are multiple billing systems and procedures to work through, providing ample opportunities for fraud in Medicare/Medicaid programs and many infractions go unnoticed. The government therefore relies heavily on qui tam whistleblowers to report corporate fraud against the government. The four whistleblowers that brought the suits against Healogics are entitled to a qui tam reward of around $4.2 million between them.

Read the DOJ Press Release: Healogics Agrees to Pay Up to $22.51 Million to Settle False Claims Act Liability for Improper Billing of Hyperbaric Oxygen Therapy