Medicare Fraud Whistleblower Lawyer Explains: Red-Lining: Medicare and Medicaid

07/14/2015 // KellerGroverWB // (press release)

Those whose health care is paid for by Medicare and Medicaid are just like everyone else, some are more healthy while others suffer from chronic conditions. The healthier people incur fewer medical expenses because they need less treatment.

Medicare and Medicaid cover people no matter their health or the likelihood that they will become sick. Government health care programs normally pay health care providers a fixed amount for a patient with a specified diagnosis without taking into account who the patient was or how much care it actually took to make the person better. Since the provider is paid the same no matter what it costs the provider for treatment or the length of a patient’s hospital stay, the sickest patients who need the most care are the least profitable to treat and least attractive to the provider.

This creates incentives for healthcare providers to try to attract and accept the healthiest patients, those who will cost hospitals the least amount of money because they’ll probably have the shortest hospital stays. But if a provider selectively chooses the patients who are going to have the least expensive care to maximize the profit generated by the government’s reimbursement, they may be in violation of federal and state laws, including the federal False Claims Act (FCA). The practice, sometimes called “red-lining” discriminates against sicker patients or those who have a higher risk for illness because of the greater chance of higher costs.

The practice of red-lining is prohibited by law. When submitting Medicare and Medicaid bills for payment, organizations certify they are following the law. Those engaging in red-lining while submitting claims for payment to the government certifying they are not violating the law are filing false claims for payment under the FCA.

The FCA was enacted in 1863 by Congress during the Civil War because of concerns suppliers of goods to the Union Army were engaging in fraud.  The FCA provided that any person who knowingly submitted false claims to the government was liable for double the government’s damages plus a penalty for each false claim.  Since then the FCA has been amended several times and now allows for triple damages and up to $11,000 as a penalty for every false claim submitted. The FCA allows private persons to file suit on behalf of the government under its unique “qui tam” provision to allege violations of the FCA.

For more information about how Keller Grover supports and assists whistleblowers in beating back fraud, contact the firm’s lawyers at or call its Whistleblower Helpline at 866-486-1537.

Keller Grover 

Medicare Fraud Whistleblower Lawyers of Keller Grover


Media Information:

Phone: 866.486.1537
Url: KellerGroverWB