Written by attorney Mark D. Walters

False Claims Act Case Alleging Inflated Milage Expense Reimbursements Reports

The United States Government filed in November of 2011 a False Claims Act case that alleged that BestCare Laboratories, Inc. and its founder and principal, Karim A. Maghareh, knowingly misrepresented the distances traveled by its lab technicians to artificially increase reimbursement from Medicare for mileage-based technician travel allowance fees.

The original lawsuit was filed by Richard Drummond under the qui tam, or whistleblower, provisions of the False Claims Act. The qui tam provisions allow private parties, called “relators," to sue on behalf of the United States persons or companies they believe have knowingly submitted false claims for government funds. Relators are entitled to receive 15 to 25 percent of any recovery if the United States intervenes in the suit, as it has here, or 25 to 30 percent if the United States declines intervention. Defendants who violate the False Claims Act are liable for three times the government’s damages plus civil penalties.

Here, Mr. Drummond, must have had inside information about the inflated milage expense reimbursement reports, and he bravely blew the whistle. Whstleblowers like Mr. Drummon help the government recover ill gotten gains from dishonest companies and executives. These whistleblowers are heros, and we need more of them.

According to the complaint, 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. The complaint also alleges that Mr. Maghareh supervised BestCare’s day-to-day operations and directed or authorized the false billing.

“There’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 Assistant Attorney General for the Civil Division Tony West.

While nothing is proven yet, this case is an excellent example of the finite level that dishonest companies and executives will stoop to defraud Medicare and the U.S. taxpayers. This is also an excellent example of how whistleblowers are often the integral component in the fight against Medicare fraud. If not for brave whistleblowers like this one, this kind of fraud will often go undetected.

If you have inside information about a scheme to submit false claims to the federal government for programs such as Medicare or any other federally funded contract or program, contact Seattle Whistleblower Attorneys. We can help you blow the whistle.

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