Medicare And Medicaid Overpayment Suit Upheld

Whistleblowers, Lucas Matheny (“Matheny”) and Deborah Loveland (“Loveland”), brought an action against Medco Health Solutions (“Medco”) claiming that Medco and its subsidiaries failed to report and refund to the federal government $69 million in Medicare and Medicaid overpayments.  The plaintiffs, former employees of Medco, used the authority of the False Claims Act to bring their lawsuit.  The False Claims Act allows private individuals to sue an entity on their own and the government’s behalf.  In doing so, the individuals receive compensation for being a “whistleblower”, which is usually between 15% and 25% of the funds recovered, including reasonable expenses, attorney fees and costs.

Matheny and Loveland knew of the overpayments to Medco, but were told that because of insufficient manpower to process the necessary forms, the overpayments would not be refunded to the government.  Matheny and Loveland claimed the overpayments were transferred to fictitious patient accounts and perfect records with a zero percent error rate were created using a specific computer program.   In addition, Medco filed a false certificate of compliance with the government, knowingly concealing millions of dollars in overpayments. 

When the lawsuit was first heard by the court, it was dismissed, due to the court noting that the plaintiffs’ complaint had been amended three times and failed to state a claim. However, on appeal, the court concluded that Matheny and Loveland had sufficiently alleged the existence of a false record.  Additionally, the court held that the defendants (Medco) knew the records were false and were to be used to avoid a financial obligation to the government.

The Matheny v. Medco Health Solutions matter is a prime example for healthcare providers to be careful with potential overpayments and how to handle those overpayments should they occur.

Source: http://www.pagingdrblog.com/2012/07/09/medicare-and-medicaid-overpayment-suit-upheld/

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