Home Healthcare Fraud Results In Groundbreaking False Claims Act Settlement

An emerging trend in the healthcare industry is the development of home-based services for people who wish to live independently or whom may be unable to get to appointments out of the home.  In addition to the independence home-based services offer patients, they are also promoted as a cost saving alternative to traditional nursing homes and other types of long-term care facilities— or so we thought.

Home Healthcare FraudEager to gain a foothold in this emerging area, some home health care companies are eager to cater to every need of homebound patients—and sometimes even more.

In one of the largest home care fraud cases ever, Maxim Healthcare, a Maryland staffing and home health care company has agreed to pay various state and federal agencies approximately $150 million to settle claims based upon the companies fraudulent billing practices for home-based patients.  Investigation and litigation proved that Maxim failed to provider services to patients despite the fact that the services were billed.

The fraud was tipped off by a disabled man who was frustrated over the fact that he had been told that many of his benefits were expired as the number of allocated nursing hours had been erroneously maxed out.  Frustrated by these errors, the man took it upon himself to find out why.

Soon it was discovered that the expired benefits were not due to an accounting error or oversight, but rather a fraud perpetuated by Maxim, the company that was responsible for providing many of his home-based care.

Utilizing state and federal laws under the False Claims Act, the man initiated a lawsuit against Maxim for its fraudulent billing practices.  Recognizing the importance in identifying and preventing fraud in situations where companies illegally drain government funds, the False Claims Act permits private citizens to pursue civil lawsuits against the fraudulent companies.

While the majority of the civil damages are returned to the defrauded government agencies, the False Claims Act allows individuals who prosecute these cases, known as whistleblowers, to recovery a percentage of the recovery from the company.

In the case of Maxim, the whistleblower will receive $15.4 million for his role in exposing the fraud and assistance with the prosecution.

While such an award to an individual may appear to be excessive, when compared to ongoing healthcare fraud, the award to the whistleblower is actually a bargain for taxpayers.  By some estimates, healthcare fraud drains more than $100 billion from our nation every year!  Hopefully, the publicity of awards such as this, will prove to be an incentive for individuals with knowledge of illegal billing practices at healthcare companies to come forward.


Health care: A ‘goldmine’ for fraudsters By Parija Kavilanzn CNNmoney.com

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