Medicaid Fraud and the Whistleblower

Texas' campaign against Medicaid fraud reached two landmark milestones. Since 2002, the Civil Medicaid Fraud Division (CMF) recovered more than $400 million for the state of Texas and more than $1 billion for the state and federal governments combined. Texas must share with the federal government what it recovers from Medicaid fraud because Medicaid is jointly funded by state and federal governments.

The Texas Medicaid Fraud Prevention Act also requires the CMF to share a percentage of the recovery with the private whistleblower. A huge portion of $1.01 billion recovered comes from whistleblower lawsuits initiated by private parties. After the parties filed under seal, the CMF evaluated the claims for veracity and intervened on behalf of the state.

Texas's Medicaid Fraud Prevention Act

Texas's Medicaid Fraud Prevention Act states that anyone who deliberately submits false and fraudulent claims to the state's Medicaid program may liable for damages. Under the Act, a defendant may also be sued for paying or receiving bribes in exchange for referrals.

A defendant may be ordered to pay damages up to three times the actual harm to the state, plus a fine between $5,000 and $10,000 for each violation. If harm is caused to an elderly person, the fine may be raised to $15,000 for each violation.

Private Plaintiff Rewards

Texas law authorizes a private plaintiff whistleblower in a Texas Medicaid Fraud to collect between 15 and 25 percent of the recovery when the state intervenes. If the plaintiff decides to proceed privately, he may collect between 15 to 20 percent of the amounts recovered. The court, however, retains the right to reduce the award if the plaintiff initiated the fraud or the suit is based on largely public information.

In addition, Texas law rewards whistleblowers who report activity that constitutes fraud, overcharges or abuse of funds in the state Medicaid program. The maximum award for the whistleblower in these instances is five percent of the amount of the penalty that resulted from the disclosure.

Catching the red flags

With the help of whistleblowers, CMF is nationally recognized for its Medicaid fraud recoveries. Following is a list of mischievous conduct may signify fraud:

·            Charging full prescription price when partially filling a prescription

·            Deliberately providing defective services or products

·            Prescribing medications or treatment that are not needed

·            Giving kickbacks to a medical provider to persuade the provider to prescribe drugs

·            Charging a higher price to Medicare and Medicaid patients

·            Altering a diagnosis or treatment code to obtain a higher reimbursement from the government

·            Upcoding a diagnosis — i.e., falsely diagnosing a more severe ailment to justify a more expensive drug treatment

·            Changing a patient's prescription from one drug to another to obtain kickbacks

·            Falsely detailing drug research grant information to the government

One assistant attorney general insists that Texas' success is due to whistleblowers because they possess a unique knowledge about the fraudulent activity.

If you suspect that you witnessed Medicaid fraud, it is recommended to consult with a Texas Whistleblower attorney who can protect your interests throughout the case.