Litigation Services Handbook, 2015 Cumulative Supplement: The Role of the Financial Expert, 5th Edition

CHAPTER 37A

HEALTH CARE FRAUD AND FALSE CLAIMS ACT DAMAGES

Frank E. Correll Jr. Thomas A. Gregory Gregory M. Luce Karen Makara

CONTENTS

37A.1 Introduction

37A.2 The Health Care Reimbursement System

(a) Fee-for-Service

(b) Managed Care

(c) Primary and Secondary Insurance

37A.3 Background and Purpose of the FCA

(a) Development of the FCA

(b) Current Law

(c) Examples of FCA Enforcement in the Health Care Industry

(d) Statistics on FCA Prosecutions and Settlements

37A.4 Approaches to Damages Calculations

(a) Simple Fraud

(b) “Worthless” Services

(c) Stark Law and Anti-Kickback Statute Violations

(d) Netting

37A.5 Practical Considerations for the Expert Witness

(a) Reliability and Applicability of the Available Data

(b) Sampling

(c) Period at Issue

(d) Changes to Attorney Work Product Protection

NOTES

37A.1 INTRODUCTION

In 2012, health care expenditures represented approximately 17.2 percent of the U.S. gross domestic product.¹ Health care fraud represents a significant cost to the U.S. government and to taxpayers. A 2012 article in the Journal of the American Medical Association—coauthored by a former administrator of the Centers for Medicare and Medicaid Services (CMS), the federal agency charged with implementing the Medicare and Medicaid programs—estimated that health care fraud cost those two programs between $30 billion and $98 billion annually.² The False Claims Act (FCA) is the government’s primary and most effective civil enforcement tool in fighting health care fraud. It ...