April 9th, 2019

Patients rely on care providers to give them advice based on their own best interests, but when kickbacks are involved, these patients are getting advice based on something else entirely that could put their health at risk. Whistleblowers are encouraged to fight back for the benefit of everyone. Here’s how whistleblowers can fight kickbacks in the health care industry.

Get to Know the Laws Relative to Kickbacks in Health Care

Educating yourself about the laws related to kickbacks in the health care industry is extremely important for patients. There are both federal and state laws that prohibit kickbacks and payments for health care referrals. The Federal Anti-Kickback Statute and Stark Law are a few of the federal law examples, but multiple states have enacted their own protections as well. In general, all these laws say the same thing: it is illegal to influence referral decisions by paying care providers with money or gifts.

File a Claim Under the False Claims Act

It is not uncommon for medical professionals to get kickbacks in the form of money, trips, or fancy resort stays for referring patients to outside care providers like labs, pharmacies, or specialists. Unfortunately, doctors are not the only ones guilty of accepting kickbacks. Nursing homes, hospitals, and even specialty care centers have been found guilty of this fraudulent behavior.

If you suspect this is taking place, you can file a report using the False Claims Act with the Department of Justice. Under this act, you, as a whistleblower, will be allowed to work with the department to file a report and provide information. The claim will be investigated, and if fraudulent activity is discovered, you may get to share in the monies recovered. If you need help filing a claim, reach out to us at The Whistleblower.com.


Full transcript below:


How Whistleblowers Can Fight Kickbacks In The Healthcare Industry

Kickbacks in the Healthcare industry.  What are they?  Why they are bad?  And what can you, as a whistleblower, do about them?

What is a kickback?

It’s a bribe. Paid to a buyer’s agent.  Like this: I’m looking to buy a video camera.  I don’t know much about video, so I ask my brother Matt to help me decide where to go; what features I need; how much to pay.

If one of the possible sellers says to Matt:

“Dude, I’ll give you 50 bucks to tell him to buy my camera, and a hundred bucks if you tell him he should pay full price because you don’t negotiate things.”

That’s a kickback.  Matt sold me out to get the 50 bucks or 100 bucks.

And you think, “Dude?!? Your own brother!  Selling you out for $100, that’s bad.” [But, my brother Matt would never do that, he’s a peach!]  But what about your doctor?  The person you trust to cure your cancer.

Kickbacks are a big problem in the healthcare industry

Sadly, kickbacks are a particularly pervasive problem in the healthcare industry because healthcare is complicated.  As a patient, it’s hard for us to tell which treatments we need, or which provider is better.  So, we rely on the medical judgment of doctors, hospitals, other healthcare providers.  Many – most – of these people are highly ethical and honest, but some aren’t.  And all of them are human.

The reality is: there’s a lot of money to be made from a referring doctor’s decision about where to send their patients.  All of these people want referrals: (1) Hospitals; (2) Surgeons; (3) Specialists; (4) Drug companies; (5) Pharmacies; (6) DME companies (motorized wheelchairs, etc.) ; (7) Clinical labs; (8) Imaging (MRI, CT, Ultrasounds); (8) Nursing homes; (9) Rehabilitation facilities; (10) Dialysis centers.

And studies have shown that, unfortunately, if a doctor owns a share of a clinical laboratory, he or will send their patients to that lab – and order more tests usually.  Same thing for ownership of a diagnostic imaging center – beaucoup CTs and MRIs and ultrasounds on the way….”

Or if that doctor can buy into the profits of a joint venture: (1) Ambulator surgical center; (2) Dialysis center; (3) Medical equipment distributorship (POD); (4) Lab; (5) Imaging Center.  Profits drive decision-making.  It’s sad but it’s true.  It is human nature.

The same can be true if the doctor: (1) is a paid speaker for a drug company; (2) gets paid to conduct sham clinical studies; (3) gets paid to go on supposed “Advisory Council” trips to fancy resorts on the beach; (4) or if the doctor is paid a bunch of money as a “consultant” or Medical Director – don’t do much work, but get paid a lot of money by someone who wants your referrals.

It’s not just doctors who get kickbacks.  Hospitals are often in a position to send a lot of business to other healthcare providers — companies that treat patients after they leave the hospital, such as DME companies and home health agencies.

Nursing homes too.  They are often offered kickbacks — money and especially free stuff, such as consulting services – for referrals for prescription drugs, physical and occupational therapy, transfers to hospice or other follow-up care.

Federal and State Law Prohibits Kickbacks

So, the Federal government and many states have recognized this problem and responded by passing laws – especially the Stark Law and the Anti-Kickback Statute — that prohibit paying doctors or other providers kickbacks to influence where they send their patients.  There are various laws, but the core is the same: It is illegal to give anything of value to influence providers’ decisions about where to send their patients.

What can a whistleblower do?

So, what can a whistleblower do if they know about this kind of fraud?  Often the best and most direct option is to file a case under the False Claims Act.

The False Claims Act allows a whistleblower to work with the Department of Justice to help investigate the fraud and hold the fraudsters accountable.  Kickback tainted referrals, under both the Stark Law and the Anti-Kickback Statute are false claims.

By filing a False Claims Act case, you can help the government fight this fraud, and if successful you get to share a portion of the amount recovered.

So, I hope this discussion of kickbacks in the healthcare industry and the damage that they can do has been helpful.  If you have questions, if you want talk about a specific situation, and especially if the f False Claims Act might be the right way to try and address fraud, please feel free to contact me at TheWhistleblower.com or (207) 747-7639.