There are multiple takeaways in the wake of a recent conclusion to a federal fraud case. These two stand out as especially prominent:
- Fraud probes in the Medicare area can yield recoveries that truly sting for defendants and the companies they own or operate; and
- Remuneration for a whistleblower who first files a fraud lawsuit on behalf of the government can be impressively large
Those dual realities are firmly on display in a federal case that wrapped up just last week in Delaware. That matter concluded with a so-called default judgment granted to federal authorities following the failure of a diagnostic scanning company and its owner to defend against the government’s fraud claim and demand for damages.
The gist of the government’s claim against Orthopaedic and Neuro Imaging LLC (ONI) was that the company submitted bogus Medicare billings for years, bilking taxpayers through fraudulent accountings that court documents described as “shams.”
Specifically, ONI injected special dye into MRI patients in thousands of instances, a procedure that the company did on its own notwithstanding a requirement that it be personally supervised by a physician.
That the fraud was discovered owes to the inside knowledge of a long-time ONI employee who noted the irregularity and pressed the company’s owner on it. That individual was lied to and subsequently filed a so-called qui tam False Claims Act lawsuit on behalf of the federal government as a whistleblower. Government authorities intervened in the case last year.
As noted above, the matter just settled, with ONI and its owner now facing a government demand of $16 million in penalties for falsely submitted Medicare billings. Federal law provides that the whistleblower could receive up to 18% of that amount, which equates to a possible recovery of nearly $3 million for the ex-ONI employee.