On February 4, 2021, the Department of Justice (“DOJ”) announced a settlement of allegations of Medicare Fraud brought by a qui tam relator under the False Claims Act (“FCA”) related to “Operation Brace Yourself.”

This case is a shining example of how laws that incentivize whistleblowers can help uncover large frauds. The False Claims Act is an essential tool for the detection and successful prosecution of fraud and corruption.

The whistleblower lawsuit alleged that Kelly Wolfe, a Florida businesswoman, and her company Regency Inc. (“Regency”), submitted false claims to the United States for braces and other durable medical equipment (“DME”). The qui tam lawsuit was filed in March 2019 by Condra Albright, a former employee of Regency. 

Not long after the lawsuit was filed, the DOJ announced a coordinated nationwide raid on April 9, 2019. The government named the investigation “Operation Brace Yourself.” The operation resulted in an estimated cost avoidance of more than $1.5 billion in the amount paid by Medicare for orthotic braces in the 17 months following that takedown. The whistleblower, in this case, played a crucial part in the operation.

The allegations against Wolfe, Regency, and their co-conspirators included falsifying documentation to create fake DME companies to bill for medically unnecessary DME equipment and improper marketing practices that violated the Anti-Kickback Statute.

According to the Department of Justice (“DOJ”) press release, the fraudsters secretly gained control of multiple companies. This allowed them to submit over $400 million in illegal DME claims to Medicare and CHAMPVA (i.e., the Civilian Health and Medical Program of the Department of Veterans). They used the excuse of “telemedicine” to account for the unusually high volume of claims when, in fact, they were allegedly bribing doctors to approve them. 

Wolfe and Regency agreed to pay up to $20,332,516 to resolve these allegations.

Whistleblowers file qui tam lawsuits on behalf of the United States to recover money that wrongdoers fraudulently took from the government. Qui tam lawsuits allow private individuals and entities with evidence of fraud against federal programs or government contracts to file a lawsuit against the wrongdoer, standing in place of the United States government. The FCA protects whistleblowers and pays rewards between 15 to 30 percent to those who successfully assist the government in recovering funds. In this case, the qui tam relator will receive $4,676,478.00.

Qui tam lawsuits are one of the strongest methods for whistleblowers to assist the government in preventing healthcare fraud. Whistleblowers who witness scams related to Medicare/Medicaid violations and the anti-kickback statute can use confidential and anonymous reporting channels to file reward claims using an experienced qui tam attorney.

To file a qui tam lawsuit, a whistleblower (“relator”) must hire a qui tam attorney. This is due to the complexity of filing a qui tam lawsuit. There are specific requirements for filing an FCA complaint. If these requirements are not met, the whistleblower will not be rewarded. Learn more about the requirements in this simple guide:  Filing a Qui Tam Lawsuit: Updated 2021.

Ben Kostyack also contributed to this article.