Cost Report Fraud

Serving Clients Nationwide

In addition to compensating nursing homes, hospitals, and certain other health care providers for patient care, Medicare and Medicaid allow for reimbursement for additional costs, including overhead, capital improvement, and financing.  As such, providers may submit a claim to the government for a percentage of these additional costs by filing cost reports at the end of each year.

The amount due to the provider is based on a formula that incorporates the costs incurred in rendering patient care, and providers are instructed that they will be reimbursed only on the basis of costs relating to rendering patient care.  Providers are instructed to allocate their costs into “cost centers” in order to distinguish patient care costs from other costs.  After allocating cost centers, providers then must apportion the patient care costs between Medicare or Medicaid beneficiaries and other patients not covered by those two programs. 

Examples of Cost Report Fraud

In a cost reporting scheme, providers can commit fraud in cost reporting in various ways, including:

• Billing for expenses unrelated to patient care
• Inflating expenses that are related to patient care
• Shifting costs to reimbursable cost centers or to covered patients
• Failing to disclose the related status of business entities with whom the provider is dealing

Notably, in 2003, the government obtained a tremendous victory against HCA Inc. (formerly known as Columbia/HCA and HCA – The Healthcare Company) for fraud relating to overpayment of claims arising from fraudulent cost-reporting practices.  Specifically, HCA agreed to pay the United States $631 million in civil penalties to settle the false claims submitted to Medicare and other federal healthcare programs and, as part of the settlement, designated $250 million to resolve damages related to cost report fraud.

Experienced Qui Tam Whistleblower Representation

If you have knowledge of any of the above schemes involving cost report fraud, you can become a whistleblower by filing a qui tam lawsuit. As a whistleblower, you can help stop fraud against the government and even receive a percentage of the amount recovered as a whistleblower reward for your service to the taxpayers.

Kenney & McCafferty is a public interest law firm whose dedicated qui tam attorneys have been assisting whistleblowers in their qui tam actions for over fifteen years. Our experience enables us to work closely with the U.S. Department of Justice and state attorney general offices to rectify cases of fraud reported by whistleblowers while simultaneously working to protect the client’s rights under the applicable provisions of the False Claims Act.

Kenney & McCafferty attorneys will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys during these consultation services are confidential and protected by the attorney-client privilege.

If you have knowledge of a fraud or false claim against the government, please contact our qui tam lawyers today.