Whistleblower reports are getting more rampant in the country, showing the increased incidence of fraudulent and criminal activity by some of the biggest organizations. For example, in Florida, the University of Miami was recently forced to fork out millions in fines after a whistleblower accused the educational institution of Medicare fraud.
According to an official case document from the Department of Justice (DOJ), a former senior executive at the school had raised an alarm over Medicare fraud occurring in its healthcare system. The executive had pointed out that the university’s healthcare system had engaged in three practices that violated the False Claims Act.
The False Claims Act is one of the strongest whistleblower laws in the United States. It is also the country’s first whistleblower law, being signed into law in 1863 by President Lincoln. Under the law, whistleblowers can be rewarded for disclosing fraud that results in financial losses to the federal government in a confidential manner.
Provided that the whistleblower’s information results in a prosecution, the whistleblower is awarded a reward between 15 and 30 percent of the proceeds collected.
A Background to the UofM Case
According to the DOJ’s case file, the whistleblower had revealed three instances where the University of Miami committed Medicare fraud. First, the university had knowingly made improper billings for its hospital facilities. While Medicare laws allow for medical systems to convert physician offices to hospital facilities, they will need to satisfy several operational requirements.
The university understands that it would be able to make money by billing as a hospital facility. However, one of the requirements for making this conversion will be to provide adequate notice to the beneficiaries that it would be billing as a hospital facility. As the government alleged, the university made this billing change without giving the proper notice.
As for the second violation, the University of Miami reportedly conducted several unnecessary lab tests for patients who got kidney transplants at the Miami Transplant Institute (MTI) - a program it operates in collaboration with Jackson Memorial Hospital. Whenever a patient enrolled in the institute, the University of Miami would immediately organize several tests - many of which were medically unnecessary. Still, the tests were conducted, and the patients were billed.
In the third violation, the university forced Jackson Memorial to submit reimbursement claims for pre-transplant lab testing conducted in the MTI. These claims were significantly inflated. The university forced Jackson Memorial to purchase pre-transplant lab tests from it - at inflated costs.
Fraudulent Acts Come Full Circle
The University of Miami had reportedly been engaging in these acts after it ran into massive debts years back. Its balance sheet had suffered after it transformed its medical school into an expansive academic healthcare system.
The whistleblower, who worked as the Chief Operating Officer for the university’s Miller School of Medicine, filed his case against the university in 2013. Since then, the Justice Department has been investigating the veracity of his claims. He claimed specifically that the university’s topmost corporate officers didn’t just know about the illegal acts - they encouraged it.
With the case’s scope being so large, it got interest from not just the Justice Department. According to reports, the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services also led probes into the case. The agencies were especially interested in finding out the officials who knew of the case and continued to encourage it.
Interestingly, the Health Services Department and FBI failed to indict a single person.
With the case now solved, the University of Miami is set to pay a staggering $22 million fee to resolve the fee. In accordance with the False Claims Act, the whistleblower is now set to receive as much as $4 million.
Healthcare Citizens Still Lose
Juan Antonio Gonzalez, the Acting U.S. Attorney for the Southern District of Florida, said in a statement:
“Medical providers who submit fraudulent claims to our taxpayer-funded health care programs not only violate the public’s trust, they compromise the very integrity of these programs. Our office will aggressively pursue investigations against all providers who knowingly violate these billing rules no matter their size.”
Brian M. Boynton, the Acting Assistant Attorney General, explained that institutions and organizations that illegally bill Medicare costs are the primary reason why healthcare costs are skyrocketing across the United States. He reaffirmed the Justice Department’s commitment to investigating and trying those who continue to violate federal laws.
While the successful indictment is a big win, it is worth noting that the people who have been defrauded are still the big losers in this case. While they had planned to prosecute the university as well, they were unable to file a class-action lawsuit as the statute of limitations didn’t allow it. So, they were left without any compensation.