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Whistleblower Suit Alleges Inflated Medicare Reimbursement Charges

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On November 22, 2011, the Department of Justice announced that it filed a complaint in a False Claims Act case against BestCare Laboratories, Inc. and its founder. The whistleblower case was originally commenced by a qui tam relator. The case is pending in the U.S. District Court for the Southern District of Texas.

According to the DOJ press release, the FCA suit alleges the defendants “knowingly misrepresented the distances traveled by its lab technicians to artificially increase reimbursement from Medicare for mileage-based technician travel allowance fees.” The lawsuit alleges that BestCare “transported laboratory test specimens as air cargo from nursing home customers located in the Austin, Dallas/Ft. Worth, El Paso, San Antonio, and Waco areas to BestCare’s laboratory close to Houston, but claimed mileage for ground travel as though its technicians personally drove the specimens one way or round trip between those cities and its lab in Houston.”

According to the release, the government stated, “[t]here’s no question that health care providers are entitled to recover their reasonable costs for services they actually deliver, but we have zero patience for those who invent or inflate Medicare reimbursement claims,” said Tony West, assistant attorney general for the Civil Division. “As today demonstrates, the Justice Department will vigorously enforce the False Claims Act to protect our seniors and safeguard the Medicare trust fund.”

Kenneth Magidson, U.S. attorney for the Southern District of Texas, added that his office “is dedicated to recovering taxpayer dollars misappropriated from Medicare...we are committed to aggressively litigating civil suits against dishonest providers to protect the seniors who depend on Medicare.”

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Hodgson Russ is one of only a few major law firms that represents both whistleblowers and companies accused by whistleblowers of wrongdoing. This unusual perspective means we are exceptionally well positioned to advise whistleblowers about potential claims.

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