March 31st, 2012

I think we’d all like to think that if we were put into a situation where we knew that something was wrong, that we’d speak up, but that’s not always the case, especially in a workplace environment. Many people would be afraid that if they did speak up, it could cost them their jobs. Recently, LifeWatch Services Inc. has agreed to pay $18.5 million to settle charges that it submitted false claims to federal health care programs. All of this came to light because two former sales representatives chose to speak up and report the abuse.

The sales representatives filed the whistle-blower suits in December 2009 and May 2011 under the provisions of the False Claims Act. With this filing the two will receive approximately $3.4 million plus interest as their share of the settlement proceeds.

The False Claims Act was put into place to help weed out fraudulent activities within companies that receive government reimbursements, while at the same time protecting taxpayers. Also, it ensures that tax dollars go to the intended programs, not into the pockets of those that cheat the system.

The complaints against LifeWatch included:

  • The company improperly billed Medicare for ambulatory cardiac telemetry services. The company was aware that this type of service was ineligible for Medicare reimbursement, but submitted claims anyway using wrong diagnostic codes.
  • Providing full-time employees to several hospitals and medical practices without a charge; this resulted in kickbacks.

The False Claims Act worked in this instance and the company was fined to settle the charges.

Source: Business Insurance, “LifeWatch settles whistle-blower suits for $18.5 million: Justice Department,” Judy Greenwald, March 23, 2012.

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