Under federal law, it can pay to read your bills closely
Individuals can file claims on behalf of government
THE $2.6 MILLION settlement the Massachusetts Eye and Ear Infirmary agreed to earlier this week with the US Justice Department started out with a single customer who believed he was charged more than he should have been for treatment of a chronic sinus infection.
Benjamin Schwarz went to Mass Eye and Ear for two visits in 2017 and came away convinced the clinic charged him and his insurer for a more complicated – and more expensive – procedure than he actually received. Under a section of the False Claims Act that allows ordinary citizens to file complaints on behalf of the federal government, Schwarz assumed his personal overcharge meant Medicare and Medicaid were being overcharged, so he took Mass Eye and Ear to court. [CORRECTION: The original version of this story said Schwarz’s insurer was Medicare.]
Such cases are not uncommon. Gregg Shapiro, who previously headed the section of the US Attorney’s office in Boston that handles such cases and now works in private practice, said more than 600 cases of this type were filed last year across the country. Typically, he said, 10 to 20 are filed each year in Massachusetts.
Once the case is filed, the Justice Department can decide whether it wants to get involved in pursuing evidence or stay on the sidelines. If the agency gets involved and the case is successful, the original claimant can receive anywhere from 15 to 25 percent of any settlement or judgment. If the government does not get involved and the original claimant proceeds alone, he or she can receive anywhere from 25 to 30 percent of the settlement or judgment.
In 2017, the pharmaceutical company Mylan agreed to pay $465 million to settle charges that it violated the False Claims Act by misclassifying EpiPen as a generic instead of a branded drug to avoid paying rebates to Medicaid. According to the settlement, Mylan raised the price of EpiPen by approximately 400 percent between 2010 and 2016.
The lawsuit against Mylan was initiated by a competitor, Sanofi, which sold its own branded version of the same type of drug and alerted federal authorities to what Mylan was doing. For its efforts, Sanofi received $38.7 million as its share of the federal settlement.In the Mass Eye and Ear case, the US Attorney’s office investigated and determined that Schwarz was on to something, but not what he originally thought. The settlement reached this week concluded Mass Eye and Ear had improperly pocketed about $1 million in extra fees for office visits that weren’t warranted over an eight-year period. To settle the charges, Mass Eye and Ear agreed to pay a total of $2.6 million, with Schwarz receiving 15 percent, plus $78,000 in attorney fees.
Joseph Bonavolonta, special agent in charge of the FBI’s Boston office, issued a statement thanking Schwarz for coming forward with the original allegation. “We’d like to encourage others to do the same because standing up for what’s right and safeguarding taxpayer dollars is critical, given that every year the submission of false claims to the government costs taxpayers billions,” he said.