What if You Suspect Health Care Fraud?

By Joe Flores, JD, APRN, FNP • Nurse Practitioner
Published on Jun 27, 2018

Op-Med is a collection of original articles contributed by Doximity members.

Every day, fraud occurs in different areas of our practice. APRNs are on the frontline, and care must be taken that your NPI, DEA number, or title are not popping up with an entity under investigation.

If you discover fraud, what can you do? “Lawyer up,” preserve documents (an exception to HIPAA if being turned over to your lawyer or the government), and do not delay. Failure to seek a legal opinion can make even the innocent look complicit and part of a health fraud scheme (conspiracy or aiding and abetting). Contrary to what we have been taught, attorneys that are on your side can make the difference between a devastating blow to your career or even your freedom and financial independence.

Case Reporting

A person who reports an incident in a properly and timely correct manner is known as a “relator.” A relator files a sealed case on behalf of the government by and through their attorney. A sealed case is kept secret and undisclosed to prevent the matter from becoming public. A relator (nurse, APRN, or other party) cannot disclose the case to third parties or may be accused of obstructing justice or at the very least “breaking the seal.”

Common complaints under seal allege that entities are upcoding, defrauding, or falsifying services, including making outpatient services look like more costly inpatient services. Other schemes can include falsely certifying that patients qualify for home services when they do not meet criteria and kickbacks being paid for the false approval of orders, such as 485 home care plans.

The Federal False Claims Act, 31 USC section 3729 is one example of laws in effect to punish wrongdoers; protect the taxpayer; and prevent fraud, abuse, and waste. Along with the federal laws in effect, there are state counterparts (such as in Texas — the Medicaid Fraud Prevention Act, Tex. Hum. Res. Code Ann. Section 36.001). Agents on a state and federal level perform vital work in preventing fraud, and relators are a major part of uncovering such acts of abuse, waste, and other illegalities.

Hospitals specifically are subject to the Medicare Program, Title XVIII of the Social Security Act, 42 USC section 1395 (Medicare Program) and the Medicaid Program, Title XIX of the Social Security Act, 42 USC section 1396 (Medicaid Program). Hospitals and other institutions are charged with knowing the law and having a strong compliance program in place. Billions of dollars are being recouped for unnecessary procedures, such as schemes in long term care to “skill” a patient in order to receive occupational and physical therapy who may lack the mental or physical capacity to do so. Still others are then switched to hospice once the “skilled” therapy dollars have run dry. Schemes to switch seniors to different home health companies are myriad as are “pill mill” clinics who run on a cash basis and are selling Schedule II narcotics on a cash basis in dangerous combinations (such as the “Houston Cocktail” of Lortab, Soma, and Xanax prescribed together). Although fraud prosecutors and agents are uncovering these schemes, there are a multitude of other schemes that are more subtle, such as obviating patient choice of providers, unscrupulously having seniors add on Medicare supplements without their full knowledge, or providing financial incentives or promises of benefits to switch plans. Individuals posing as “marketers” steer patients towards doctors, clinics, and even social workers and discharge planners while patients are being discharged.

Other Types of Scams

Areas that are rampant with abuse: unnecessary procedures (heart catheterizations, bronchoscopies and bronchial lavage), extended or absent weaning from ventilators to extend ICU days, and prolonging stays in facilities. In the home health arenas, physicians may be lacking the legal knowledge to be aware of, or not caring to know, the steps to take for a face to face encounter and recertification of home care delivery. EMTALA (Emergency Medical Treatment and Labor Act) is being abused by refusing patients sufficient stabilizing treatment and improperly discharging the patient. Such actions violate state and federal law.

Case Resolution

Once the government has done a thorough undercover investigation (which has become easier with electronic billing and medical records over the past decade), the complaint filed by the relator/whistleblower is unsealed. Often the relator is entitled to 5 to 20 percent of the total recovery, depending on several factors, such as the investigation remaining top secret and if the relator is the original source of the investigation. (Some cases have recovered up to 9 figures.)

Depending on the conduct of the health provider, the case may be a civil case, a criminal case, or both. Often the larger corporate chains aka “Too Big to Fail” are the payors of fines. Smaller agencies and practitioners may face fines, prison, or both. Such a determination can be made after a thorough investigation. Often the government may turn down the opportunity to go after the offender based on case load and other factors. The relator and their attorney still may pursue the case alone and expose the violator. The outcome in either instance may be a dismissal or settlement. Realistically, if the government accepts the case, it is more than 90 percent likely that the case will settle.


The government is increasing its scope and broad power to investigate state and federal health care fraud and waste. As the APRN becomes a key player in the medical field, becoming a relator and reporting potential fraud can save your reputation, license, livelihood, and freedom. Both physicians and nurse practitioners and other healthcare providers, as well as owners of health care businesses, need competent legal counsel and compliance plans, and must self-disclose or else face fines or incarceration.

Joe loves what he does. He is an APRN (Advanced Practice Registered Nurse and a Board Certified Family Nurse Practitioner (FNP-BC). He also happens to be a lawyer who has dedicated his career advocating for patients and defending health care providers in Texas and in federal court and is a nationwide lecturer, author and television show host in South Texas. Joe can be reached any time via e-mail at [email protected], on his FB page: Flores Law Firm, or at 361–887–8670.

Image: Video_Creative/Shutterstock

Originally published on Doximity

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