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Whistleblowing, Pt. 3: Medicaid Fraud

It’s not only high-level health care and pharmaceutical company employees who can initiate whistleblower claims. One of the most successful instances of the False Claims Act in recent years was a lawsuit brought by a 63-year-old disabled Medicaid patient.Richard West, a veteran of the Vietnam War afflicted with muscular dystrophy, was heavily reliant on the care Medicaid afforded him. He was confined to a wheelchair, used a ventilator to breathe, and required in-home nursing care. This explains why he became so alarmed when he received a notice that his Medicaid benefits were going to be cut off after exceeding his monthly maximum.Richard was certain that he had not gone over his monthly limit, so he looked into where his Medicaid payments had been going in recent months. What he found was a pattern of drastic Medicaid overbilling by his healthcare provider, Maxim Health Services. Maxim had billed Medicaid for 735 hours of nursing service that had never been provided to Richard, the equivalent of $20,000 of fraudulent charges.Horrified by the thought that Maxim would take advantage of patients’ disabilities for profit, Richard brought this information to all the authorities he could think of. He contacted officials in the New Jersey state government, Medicaid, and Veteran Affairs, but they all failed to take action against Maxim.Finally Richard decided to file a lawsuit against Maxim under the False Claims Act. His case was picked up by the government, and in September 2011 resulted in a $150 million settlement. Eight former Maxim employees pleaded guilty to felony charges of fraud.For his persistence, Richard was awarded $14.8 million by the government.Medicaid is designated by the US Government Accountability Office as a high-risk government program, meaning that it is particularly susceptible to wasteful spending and fraud. Schemes like those committed by Maxim occur all the time, taking money away from taxpayers and valuable services away from people in need. All it takes is one brave person willing to do the right thing to bring this fraud to an end.Sources: “Case Studies,” Taxpayers Against Fraud Education Fund.”Medicaid Program,” U.S. Government Accountability Office.Amy Bingham, “Patient Whistleblower Exposes $150 Million Medicaid Fraud,” ABC News, December 7 2011.

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