Qui Tam Lawsuits: A Threat That Should Concern Physicians

Most physicians have heard about "Qui Tam" lawsuits and have read news coverage of physicians and other healthcare providers being sued by a whistleblower. For those not entirely familiar with the vernacular, Qui Tam provisions are found in various federal and state statutes and serve to monetarily incentivize individuals to bring to the government’s attention to violations of the law.

For physicians, the Qui Tam provisions found in the Federal False Claims Act are of particular importance. This law imposes monetary penalties for those who knowingly make or cause the making of false claims for funds or property owned or administered by the federal government. This includes submitting documentation that is materially false and leads to payment of claims submitted to a federal payer. The law also prohibits retaining overpayments received by a physician. The False Claims Act authorizes the United States to recover treble damages as well as civil penalties of $5,500 to $11,000 for each violation of the law. Many states have similar statutes which cover commercial payers and also allow for similar damages and penalties.

Whistleblowers can take as much as 40 percent of the proceeds of a successful Qui Tam action. Given the financial rewards, it’s easy to understand the incentive these provisions provide. In fact, an entire industry has grown around incentivizing individuals to bring Qui Tam actions. Other than lawyers who search for the ideal Qui Tam plaintiff, there are nurses, billers, and others who understand the payday a Qui Tam can present and who bring Qui Tams against multiple employer. The idea that your staff may be looking for your billing and legal weaknesses is scary; moreover, in the event a current staff member becomes a whistleblower, he or she may not be fired or discriminated against for bringing a Qui Tam.

Many providers feel that a Qui Tam action is not something they need to worry about. This is a common misperception. Any medical practice that possibly overcodes or mishandles documentation and claims can be subject to a Qui Tam. Perhaps your practice is not meeting medical necessity requirements or incident-to rules? All of these "errors" can add up quickly to significant funds for which the practice may be improperly billing and getting paid. Likewise, providers who determine they have been overpaid (whether through internal audit or otherwise) but do not return the overpayment, may also be subject to a Qui Tam.

There is little guidance available on avoiding Qui Tam actions. The following are some recommendations:

1. Create an open and friendly environment in your medical practice. Employees who are familiar with information about the practice and leave on bad terms are most likely to become whistleblowers.

2. Make sure the practice has strict rules in place regarding access to information and removal of information from the workplace. A typical Qui Tam plaintiff is required to collect evidence regarding what the practice has done wrong.

3. Make sure your practice has a formal audit and compliance process in place. Protect your practice by doing things properly! Every issue raised by an employee should be meticulously researched and addressed to avoid possibility of a Qui Tam. Consider bringing in a billing expert or talking with legal counsel to assure the conclusion you reach is accurate. Compliance programs should cover billing, coding, HIPAA, Stark, Anti-Kickback, and other applicable laws. Consider an anonymous hotline or website to make reporting easier.

4. If errors are discovered or amounts are determined to be overpayments, voluntarily disclose these errors and arrange for repayment within the statutory time frame.

My biggest concern about Qui Tam lawsuits is that they encourage an environment of distrust and incentivize employees to seek a payday, rather than assisting employers to improve compliance. Providers must understand that being a physician no longer means just caring for patients - it also requires physicians to meet a myriad of confusing laws that govern the business of medicine. Until Qui Tam provisions require a whistleblower to first bring potential violations to a provider’s attention and participate in efforts to improve compliance, even providers with no intent to violate the law are at significant risk.

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