Medicare Fraud Whistleblower Lawyer Explains: Red-Lining: Medicare and Medicaid

2015-07-17 20:37:52 (GMT) (Caymanmama.com - News Providers News)

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07/14/2015 // KellerGroverWB // (press release)

Those whose health care is paid for by Medicare and Medicaid are just like everyone else, some are more healthy while others suffer from chronic conditions. The healthier people incur fewer medical expenses because they need less treatment.

Medicare and Medicaid cover people no matter their health or the likelihood that they will become sick. Government health care programs normally pay health care providers a fixed amount for a patient with a specified diagnosis without taking into account who the patient was or how much care it actually took to make the person better. Since the provider is paid the same no matter what it costs the provider for treatment or the length of a patient’s hospital stay, the sickest patients who need the most care are the least profitable to treat and least attractive to the provider.

This creates incentives for healthcare providers to try to attract and accept the healthiest patients, those who will cost hospitals the least amount of money because they’ll probably have the shortest hospital stays. But if a provider selectively chooses the patients who are going to have the least expensive care to maximize the profit generated by the government’s reimbursement, they may be in violation of federal and state laws, including the federal False Claims Act (FCA). The practice, sometimes called “red-lining” discriminates against sicker patients or those who have a higher risk for illness because of the greater chance of higher costs.

The practice of red-lining is prohibited by law. When submitting Medicare and Medicaid bills for payment, organizations certify they are following the law. Those engaging in red-lining while submitting claims for payment to the government certifying they are not violating the law are filing false claims for payment under the FCA.

The FCA was enacted in 1863 by Congress during the Civil War because of concerns suppliers of goods to the Union Army were engaging in fraud.



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