NC Healthcare Fraud Case Underscores Need for Whistleblowers

On June 23, 2022, the Department of Justice announced the indictment of a Charlotte-area physician for fraud for her alleged role in an $11 million durable medical equipment (DME) fraud scheme. The physician, Sudipta Mazumder, is an internal medicine physician with more than 20 years of experience.

In this case, the doctor served as an independent contractor for a telemedicine company in Delaware from 2019-2020. The company would allegedly send her unsigned orders for medically unnecessary knee braces, which she would sign, saying that she examined each patient when she did not. The result of the alleged scheme: she would receive $20 per signature, and the company was able to fraudulently bill more than $11 million to Medicare and TRICARE for unnecessary equipment.

Fighting back against fraud

The government can’t possibly police the millions of transactions it must process every year for healthcare claims to Medicare, Medicaid, and TRICARE. Still, the government does make an effort.

In February 2022, the North Carolina Attorney General announced that the Medicaid Investigations Division (MID) had obtained two settlements totaling nearly $1.5 million. The larger case alleged false claims for dental services, while a smaller case involved a gynecologist.³

The fight is far from over

While these recoveries are good news, they may be the tip of a fraud iceberg. In the fiscal year 2021, the North Carolina Medicaid budget exceeded $18 billion. Meanwhile, the National Health Care Anti-Fraud Association estimates that healthcare fraud amounts to 3% of the national healthcare budget annually. Applying that estimate to North Carolina would mean $540 million worth of Medicaid fraud alone.

These statistics make us wonder exactly how much fraud is going undetected. Federal statistics from 2020 show that whistleblower-initiated cases – qui tam actions – accounted for more than 70% of the government’s recoveries. The government is relying heavily on whistleblowers and wants more to step forward.

Blowing the whistle could be a matter of life and death for patients

It’s not hard to imagine the good all of this money could and should be doing, but instead, it is siphoned from the government and into the accounts of fraudsters looking to strike it rich. If the COVID pandemic taught us anything, it’s that fraudsters don’t care who they hurt, what shortages they cause, or the human cost of their schemes.

Think about it this way: What if the government uses expenditure data partially based on fraudulent claims to choose to fund one program more than another? That other program may be someone’s lifeline, and now it gets too little funding because of fraudsters putting their thumbs on the scales. There is a human cost to healthcare fraud. Never doubt it.

Help wanted: Whistleblowers

The Mazumder case underscores the need for whistleblowers in the healthcare industry. Fraud does not happen in a vacuum. It often occurs in systemic, well-orchestrated schemes involving more than one person. Many involved may not be aware they’re participating in fraud, but they may be suspicious.

No matter your situation, we urge you to take action if you suspect healthcare fraud against the government. Share your concerns with us. Even if you’re unsure, we can help you sort through it, give you our opinion, and help you understand what kind of whistleblower award you might seek. The path to justice begins with the first step, and whistleblowers like you can take it.