For as long as fraudsters have existed, so have whistleblowers. Traditionally, whistleblowers have been insiders who relay personal knowledge of a company’s fraudulent behavior to the government. However, the advent of large-scale data analytics has engendered a new kind of whistleblower – “data whistleblowers.” A “data whistleblower” is a person or entity that analyzes large quantities of data to detect fraud.

Integra’s Efforts to Root Out Fraud

Integra Med Analytics is one of these new data whistleblowers. Integra uses mathematical modeling to analyze massive data sets in order to detect fraud. Subsequently, Integra files lawsuits under the False Claims Act (FCA). We previously wrote about the promise of Integra’s efforts in the whistleblower space.  Integra has filed three healthcare fraud cases, all of which the government declined to join. These lawsuits involved hospital chains in California, Texas, and North Carolina.  Integra accused the hospitals of defrauding Medicare by overcharging for hospital visits.

Specifically, Integra alleged that these hospitals applied comorbidity diagnoses at rates that far exceeded the prevalence of such conditions. Unfortunately for Integra, all three suits were dismissed, either because Integra could not provide enough details about the specifics of the fraud, or because the fraud could also be inferred from public documents. The FCA has a “public disclosure bar,” meaning a qui tam lawsuit cannot be based on information that is widely, publicly available and takes no specialized expertise to interpret.

The DOJ Joins Data Whistleblower’s Recent Suit

Despite its previous lack of success, Integra successfully persuaded the Department of Justice (DOJ) to join its most recent suit.  In this case, Integra alleges that a group of New York nursing homes improperly inflated their Resource Utilization Groups (RUGs). RUGs measure factors like how many minutes of nursing and therapy services a patient is expected to need. If a patient is likely to need very complex care, Medicare generally reimburses more of their treatment costs.

Integra looked into Medicare claims data for the New York nursing homes, and found many “ultra-high” RUGs at several facilities. “Ultra-high” RUGs are the most severe and expensive, earning the most Medicare money. Integra investigated these strange rates, and could not find any innocent explanations. Accordingly, Integra concluded they were fraudulent, and filed a whistleblower case in 2017.

Last month, three years after Integra filed their suit, the DOJ intervened in the case and file its own complaint against the nursing homes. Integra’s complaint included a detailed breakdown of its statistical analysis. For example, based on its data, Integra alleged that the Medicare program lost almost $130 million as a result of the nursing homes’ scheme.

The Future of Whistleblowing

With its most recent intervention in Integra’s case, the Department of Justice has opened the door for more data whistleblowers to file suits against fraudsters. We previously wrote about the pitfalls and promises of data analytics in the whistleblower space, and looking forward, DOJ’s decision could mean a changing landscape for False Claims Act litigation.

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