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Physicians Facing an Increased Risk of Qui Tam Suits

On April 9, the Centers for Medicare and Medicaid Services (“CMS”) released data showing physicians’ compensation for Medicare Part B billing payments in 2012. It was the first time in more than 35 years the data has been made available to the public and it unleashed a fire storm of national headlines. Most news outlets, unfortunately, failed to explain the facts behind the figures.

Physicians and health care associations fought back, offering explanations for the perceived high rates of physician compensation. For example, the data did not explain the difference between billed charges and actual payment, nor did it reveal that a significant share of Medicare payments is used to cover such costs as office overhead, employee salaries, supplies and equipment. The American Medical Association (“AMA”) released a statement on the unprecedented release: “We believe that the broad data dump today by CMS has significant short-comings regarding the accuracy and value of the medical services rendered by physicians. Releasing the data without context will likely lead to inaccuracies, misinterpretations, false conclusions and other unintended consequences.”

Medicare-accepting physicians now have to deal with the distorted public perception, as well as patient inquiries, about their personal Medicare payments. They should also be on the lookout for another problem associated with the CMS release: the possibility of increased qui tam suits. Reuters recently reported that members of Taxpayers Against Fraud, a nonprofit advocacy group with around 400 whistleblower lawyers, have already been analyzing the data for signs of fraud. There is good reason for these lawyers to be digging for clues – whistleblower cases can result in massive settlements. For example, GlaxoSmithKline paid $3 billion to resolve claims that it promoted drugs for unapproved uses and failed to report certain data in 2012. And, here in Kentucky, several qui tam suits addressing cardiac catheterization services among others are pending.

The released information can not only help lawyers find new targets, but also aid them in cases they already have pending. Before, lawyers had to rely on the subpoena process, which can be slow and tedious, to secure this kind of information from government agencies. With access to CMS’s Excel spreadsheets of data, lawyers can expedite the discovery process and file similar cases at quicker rates. Of course, figures alone do not make a case. Lawyers still must find a client with inside knowledge of fraud that is willing to bring suit. Suspicious employees, disgruntled ex-employees, or even dissatisfied patients can now peruse the information in hopes of finding signs that point to wrongdoing.

The press was relentless, albeit largely inaccurate, about physicians’ Medicare payments. While lawyers should look at this information with a discerning eye, the fact that it is so readily available means they will be looking.

Lisa English Hinkle

Lisa English Hinkle is a Member of McBrayer, McGinnis, Leslie & Kirkland, PLLC.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at lhinkle@mmlk.com or at (859) 231-8780, ext. 1256. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

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