The press had a field day with the newly released Medicare payment data. We recently discussed the fact that many of these news outlets provided less context than we would have hoped. While the media merely scratched the surface of Medicare data, another group is perhaps digging way too deep into the numbers. Qui tam, or whistleblower, attorneys are reportedly mining the data for signs of fraud.
Reuters reports that members of Taxpayers Against Fraud, a nonprofit advocacy group with around 400 whistleblower lawyers, have already been analyzing the data "to see if doctors are prescribing an unusually high amount of the pharmaceutical company's product." Reuters interviewed Pennsylvania lawyer Marc Raspanti who noted that such anomalies "could bolster allegations that something is amiss." Before CMS released the payment data, Raspanti and other whistleblower attorneys would have had to subpoena the government for documents to support his clients' knowledge of suspect billings. "Now I have (the data) at my fingertips," he said.
In February, we wrote an article on how qui tam attorneys could use the Physician Payments Sunshine Act to bolster fraud claims. The Sunshine Act requires drug manufacturers to provide the Centers for Medicare and Medicaid Services (CMS) with data on all of the transfers of value over $10 that the company makes to physicians. Attorneys could use this information to argue, for instance, that certain physician payments constituted kickbacks to doctors who prescribed a lot of a company's drugs.
We reported that at the very least, Sunshine data will provide facts to beef up a plaintiff's complaint. Rule 9(b) of the Federal Rules of Civil Procedure requires that for "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." The exact dates of a questionable transactions and the precise amounts of payments would add that required specificity. Additionally, the data could support an inference of off-label marketing. If a pharmaceutical company's main products are oncology drugs, and the company has substantial payments to doctors who practice in cardiology, attorneys don't have to reach too far to make off-label allegations.
The Medicare payment data provides similar information. Reuters notes that if an attorney "were representing a pharmaceutical sales manager accusing his company of paying kickbacks to certain doctors, the data could point to other providers using the company's products who could serve as witnesses or be added as defendants if the billings suggest wrongdoing."
Or attorneys could use the data to come up with cases. "When red flags emerge – a doctor bills Medicare an unusually high amount for a particular drug, say – lawyers could investigate what might explain the aberrant figure. That could turn up a possible fraud."
As we noted in the previous qui tam article, lawyers still need to find clients who have insider knowledge of alleged fraud. The False Claim Act contains a "public disclosure bar," which is triggered when the fraud allegations were in the public domain before a qui tam relator filed suit. Since Medicare data is now in the public domain, whistleblowers still need some firsthand information.
However, no company will want to be an outlier when it comes to Medicare billing. Once the Sunshine Act payment data is public, we suspect that attorneys will be able to correlate (and perhaps manipulate) the Medicare and Sunshine information to make an allegation of fraud. For example, the Medicare database could show that a doctor prescribed Drug X a hundred times in 2013. The Sunshine database would reveal that the company who manufactured Drug X also paid the prescribing doctor $1,000 in meals or other transfers of value during the same year.
As we've seen from various news articles, the money doesn't have to be big for the press to question a doctor's prescribing practice. Even scarier are the attorneys who will simply look at two spreadsheets of data and have an articulable case that a company provided kickbacks to high-prescribing doctors.