Medicare Fraud: Clinical Nurse Manager Questioned Disputable Billings, But Retaliation Lawsuit Thrown Out By Federal Court.

Medicare Fraud: Clinical Nurse Manager Questioned Disputable Billings, But Retaliation Lawsuit Thrown Out By Federal Court.

Legal Eagle Eye Newsletter for the Nursing Profession

October 1999

The Federal False Claims Act is one of the government’s primary tools for fighting fraud by vendors who receive government payments, including healthcare providers who bill Medicare.

"Whistleblowers" are protected by Section 3730(h):

Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employee because of lawful acts done ... in furtherance of action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole.

To be able to sue, the employee must prove a cause-and-effect relationship between the employee taking action against fraud or threatening to take action, and the employer visiting retaliatory consequences upon the employee. UNITED STATES DISTRICT COURT, ALABAMA, 1999.

A home health agency’s clinical nurse manager sued her former employer after she was terminated.

The nurse’s suit alleged retaliation for her bringing to light instances of Medicare fraud. Employer retaliation is outlawed by the Federal False Claims Act (FCA).

Her employer claimed she and other middle-managers were let go as a cost-cutting measure following restrictions in Medicare reimbursement rules and intense competition from managed-care and hospital-based home health agencies.

The U.S. District Court for the Middle District of Alabama ruled for the employer. The legal allegations in the clinical nurse manager’s lawsuit were flawed.

The employer did not commit Medicare fraud and there was no indication before her lawyers filed suit the nurse considered the employer’s actions fraudulent.

One home health staff nurse was under suspicion. Investigation proved one documented patient home-teaching session never took place. This staff nurse committed fraud, but the employer did not commit fraud because the billing was withdrawn and the staff nurse was fired, even though the office manager did not re-open the fired nurse’s other suspicious billings. Another patient’s Medicare eligibility was uncertain and some charges were not necessarily Medicare-eligible. The office manager gave the patient the benefit of the doubt and submitted them for payment anyway. But that also was not fraudulent.

Before being laid off the clinical nurse manager did not know the FCA existed and never said anything about reporting her employer. There can be no retaliation for an act an employee never intended or appeared likely to do, the court ruled.

Further, the court was convinced the reduction in force was a legitimate cost cutting measure and was not retaliatory. Mann v. Healthcare, 49 F. Supp. 2d 1307 (M.D. Ala., 1999).