Veterans Disability Info Blog

VA Healthcare Fraud Whistleblowers Help Stop Waste and Abuse With Potential For Big Cash Award

Medicare fraud involving care provided to veterans is rampant. Since late 2019, the Centers for Medicare & Medicaid Services (CMS) and the Department of Veterans Affairs have collaborated to stop fraud by exchanging Medicare sanctions data. Though the initiative has helped prevent some bad providers from participating in federal healthcare programs, its success has been modest.

At the time the data exchange program was announced, a spokesperson for CMS commented, “CMS is proud to work with VA and share our innovative data analytics and best practices for detecting and preventing potential fraud, waste, and abuse across other federal healthcare programs to improve care to our nation’s Veterans.”

To this day, however, the government relies on whistleblowers to expose fraud and recover taxpayer funds. As questionable providers get rich, the quality of care provided to veterans suffers. While VA authorities claim they are doing everything in their power to ensure “every tax dollar is given to the VA supports Veterans,” that is seldom the case.

As the VA comes under scrutiny for staff shortages and inadequate access to care, egregious VA healthcare fraud appears increasingly unacceptable. According to the VA Office of the Inspector General (OIG), “VA has experienced chronic healthcare professional shortages since at least 2015.” This comes as no surprise; when dishonest healthcare providers and doctors overbill Medicare, veterans suffer.

Bad Healthcare Providers Exploit the VA System

There have been many famous cases of VA healthcare fraud. A few years ago, one particular scheme detected in New York became a cautionary tale, exposing what some fraudsters are prepared to do to exploit the system.

The multimillion-dollar fraud case involved a physician who fraudulently billed Medicare for visits that never took place and treatments that were never provided. Mikhail L. Presman, a VA psychiatrist, allegedly used his private clinic to bill Medicare for home visits to patients he hadn’t seen, for time spent treating patients who were actually in the hospital at the time, and even for treatments supposedly provided when he was on vacation. According to the Department of Justice, Presman submitted false claims to Medicare in the amount of $4 million.

Dr. Presman has not been the only one to abuse the VA system. Three years after he was arrested, the government recovered $8.86 Million from another alleged fraudster. In this case, the fraud involved fraudulent billings for ineligible services. For that recovery, we have none other to thank than two courageous whistleblowers, Sheila and Louise Rose, who received a $1.5 million reward for their assistance in exposing wrongdoing.

Recent VHA Fraud and Medicare Billing Schemes

In its 2019 and 2020 reports to Congress, the VA OIG listed, among others, the following healthcare fraud cases:

  • A pharmacist who worked at a VA medical center in Louisiana was indicted for diverting “200 controlled substances, including hydrocodone and morphine, from mail order prescription packages.”
  • After a year-long investigation, a defendant was sentenced to 60 months in prison for distributing drugs at the Bedford, Massachusetts, VA medical center. The probe identified five individuals involved in distributing drugs to veterans who were receiving treatment for drug addiction at the VA medical center.
  • A VHA Office of Community Care employee allegedly received over $1 million in exchange for “referring the caregivers of seven beneficiaries with spina bifida to [a specific home health agency], which in turn billed VA for more than $3 million in ineligible home health services.”
  • The president of a medical technology company was charged with conspiracy to commit healthcare fraud. The California resident allegedly “conspired to improperly bill healthcare insurers for approximately $69 million in false and fraudulent claims for allergy and COVID-19 testing.”
  • The owners of various medical equipment companies pleaded guilty in Florida to conspiracy to commit healthcare fraud. The defendants submitted $20 million worth of “illegal [medical equipment] claims to government healthcare programs including Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA).” The elaborate scheme involved kickbacks paid to doctors in exchange for unnecessary medical equipment orders.
  • The Philadelphia VA Medical Center Chief of Environmental Medical Service was indicted for bribery. The defendant and 16 co-conspirators allegedly run a scheme that involved receiving kickbacks from supply vendors in exchange for placing orders for their products. The conspiracy involved multiple VA employees and vendors in Florida and Pennsylvania. According to the OIG, “since 2009, the vendors received millions of dollars from numerous VA medical centers throughout the country through purchase card orders and service and construction contracts.” Several defendants received prison sentences and were ordered to pay restitution totaling $3.7 million.
  • A defendant was indicted in Texas in connection with a large-scale pharmaceutical fraud scheme. According to prosecutors, the alleged fraudster received over $60 million in kickbacks from a compounding pharmacy group that billed the government in excess of $700 million, including $16.8 million billed to VA healthcare programs.

The Department of Veterans Affairs and the Medicare program have launched various initiatives to stop waste and abuse, task forces have been formed, and much has been said. But the government’s resources are limited, and if we really want to stop fraud, individuals with knowledge about potential misconduct need to come forward.

Do you work for a VA healthcare provider? Do you have documents or information related to Medicare fraud? Give us a call using a non-company phone or computer to speak with one of our VA healthcare fraud attorneys to see if your information can help report fraud and if you are eligible for a potential cash award at 888.878.9350 or online.

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If you are having trouble obtaining benefits, contact us online or at 888.878.9350 to discuss your case.