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Health Care Fraud: Seminal Whistleblower Lawsuit Settles

Whistleblowers play an important -- and often personally risky -- role in spotlighting and reducing corporate wrongdoing that occurs across the country and defrauds the general public in a material way.

Stories commonly surface, for example, of whistleblower litigation commenced in response to fraud occurring in the securities industry. In the broader business realm, too, it is often whistleblowers who point out malfeasance that steals millions from government coffers in projects involving state and federal contracts.

And then, of course, there is health care, a flatly colossal realm where an almost incalculable amount of money flows.

In recent years, government regulators and civil/criminal enforcement agencies have unquestionably placed a heightened emphasis on the identification and prosecution of alleged fraud perpetuators in the health care realm.

And it is whistleblowers who have often led the charge, given the insider status they command that enables them to closely spot and track fraudulent actions from their inception.

One especially prominent whistleblower case has just concluded. As noted by NPR in a recent report on the matter, a settlement with two insurance companies will result in their payment of approximately $32 million for what regulators say was their long-term and purposeful fraudulent behavior aimed at extracting unlawfully high payments from the Medicare program.

The case involved the so-called "risk score" payment formula commonly used by providers in the Medicare Advantage program that render care to patients in comparatively poor health. Evidence against the two insurers indicated that they purposefully and systematically exaggerated patients' illnesses and required treatments, thus upping the risk scores and receiving higher payments.

The settlement was termed by NPR as the largest whistleblower-linked outcome ever realized "involving health insurers' manipulation of their members' risk scores."


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