Stay honest! Anyone can blow the whistle
By Deborah GReen, esq

Q.I have been hearing a lot lately about “whistle blower” actions that can result in a practice going into bankruptcy and jail time for the doctor. Can you elaborate on this?

A.The “whistle blower” actions you are referring to are known as the “qui tam” provisions of the False Claims Act, which permits anyone to file a civil suit on behalf of the United States for a violation of the False Claims Act (31 U.S.C.§ 3730).

Additionally, states have enacted versions of the False Claims Act for claims made against the state. (A “qui tam” action means a lawsuit that is brought partly for the benefit of the government and partly for the benefit of the informer).

Anyone may bring such an action, including a current or former employee, a competitor, a disgruntled business partner, or a former spouse. Such lawsuits are filed under seal. The government is notified and the Attorney General investigates the allegations in order to determine whether the government will intervene and take over the lawsuit. (Such investigation may yield evidence of criminal activity and result in criminal charges being filed.)

As a reward for alerting the authorities or bringing the suit him or herself, the qui tam relator (the person who brings the lawsuit) gets a reward of 15 percent to 25 percent of the money recovered by the government — plus attorney’s fees and costs. The monetary awards can be substantial.

In addition to being assessed three times the amount claimed, the fine includes a $10,000 penalty per each item or service falsely claimed. In terms of dollars and cents, consider the following hypothetical situation:

A chiropractor sees a Medicare patient twice in one week, but bills for three visits. He receives payment of $34 per visit. Because one of those visits was a false claim, he will be assessed $102 for the false claim; he will also be penalized in the amount of $10,000 for a total of $10,102.

The qui tam relator will be entitled to an amount between $1,515 and $2,525, plus attorney’s fees and costs for the bringing of this action against the chiropractor.

As a practical matter, the government will not prosecute if such overbilling is an isolated instance. However, consider what could happen if you used a dishonest third-partner billing person who was paid on a percentage basis of the amount collected:

In this hypothetical case, assume that you see 50 Medicare patients a week, twice a week, but your billing person is billing three visits per week. In one month’s time you would owe the government $2,020,400. The qui tam relator would then be entitled to an amount between $303,060 and $505,100, plus attorney’s fees and costs.

As you can see, the financial impact of this adds up quickly. Fines may be increased or decreased based on aggravating or mitigating factors.

An effective compliance program may be the single most mitigating factor available to a professional corporation. The operative word here is “effective.” If you merely pay for a compliance program but fail to utilize it, you may be in worse shape than if you had no compliance program at all.

There is no better measure of the effectiveness of a compliance program than one which, when it encounters a compliance failure, causes corrective measures to be taken. In order to be effective, a compliance plan should be customized to your practice.

I own a very successful chiropractic practice. May I hire an MD, to work in my practice? Do I need to form an MD/DC and give up ownership of my practice?

Many states have corporate practice of medicine laws which prohibit a general business corporation from hiring MDs.

Other states permit a general corporation to hire MDs; however, the non-MD owner may not interfere with the professional judgment of the medical doctor.

In any event, a chiropractic professional corporation may not hire an MD because the scope of the chiropractic license is limited, whereas the scope of the MD license is unlimited.

Therefore, if you want to offer a greater variety of services to your patients, then, depending upon the state in which you practice, you must operate under either a general corporation or a medical professional corporation that has at least one medical doctor/osteopath as a shareholder.

Deborah Green is admitted to practice law in New York and Florida. If you have any questions concerning legal heathcare issues, please e-mail her at healthattorney@aol.com or fax her at 954-971-3787.

DISCLAIMER This column is provided for educational purposes only. The accuracy or timeliness of the information presented is not warranted. The information presented is not as legal advice with respect to any matter and that no attorney-client relationship is hereby established.