Patient Dumping May Give Rise to False Claims Act Liability

08/14/2013 // Whistleblower Law Firm // Jeffrey F. Keller // (press release)

“Patient dumping” may be an unattractive phrase, but the practice is even uglier. It happens when a hospital or psychiatric facility discharges an individual in need of care — often shipping them to a distant locale — with no treatment plan in place. Critics have long blasted the practice as inhumane, a violation of patients’ civil rights, and even illegal. It can endanger the safety of the public, too, when an unstable individual is sent out into the community with no plan for care or observation.

Under a 1986 law — the Emergency Medical Treatment and Labor Act (EMTALA) — facilities that improperly release or transfer patients can, and often are, prosecuted. But the legal issues don’t necessarily end there. Under certain circumstances, patient dumping can give rise to fraud — and for the health care providers that commit it, liability under the federal False Claims Act.

Dating back to the Civil War era, the False Claims Act is the nation’s best known and most successful whistleblower statute. It has been a potent weapon in battling fraud against the government — leading to the recovery of more than $30 billion for the government since it was substantially amended in the mid-1980s.

“Many of the patients involved in so-called ‘dumping’ actions — particularly psychiatric patients — are often covered by Medicare or Medicaid,” says Jeffrey F. Keller, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a veteran whistleblower lawyer. “Discharge planning is an important part of patient care. If facilities are still submitting claims for treating these patients when they engage in patient dumping, they could be acting in violation of the False Claims Act.”

Here, says Keller, is where whistleblowers come in. “If a hospital is engaged in patient dumping, there are employees or others who see there is no discharge planning happening, and that the hospital is billing as if it is complying with this part of its duty to provide care. ” he notes. “The False Claims Act is designed to encourage those with inside knowledge of wrongdoing to speak out. Whistleblowers are awarded a share of any recovery the government ultimately obtains, and the statute provides powerful protections against retaliation by their employer — such as demotion or even termination.”

The False Claims Act can be potent preventive medicine, too. “By providing whistleblowers a share in the recovery, the law doesn’t just serve as an incentive for speaking out,” says Keller, whose firm has offices in Los Angeles and California. “It serves as a warning to those who might act improperly — letting them know that if they commit fraud, there is a very good chance the word will get out, and justice will be served.”

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