Healthcare Fraud: Inflated Medicaid Billing

Healthcare providers violate the False Claims Act by knowingly submitting false claims for payment to government insurers. One of the most frequent sources for whistleblower lawsuits is inflated Medicaid billing.

In September of 2020, a Virginia mental health agency agreed to pay over $250,000 to settle a false claims act lawsuit.[1] Victoria Transcultural Clinical Center (VTCC) provides mental health services and behavioral therapy to adolescents who are Medicaid recipients. A former employee of VTCC filed a whistleblower lawsuit under the False Claims Act and the Virginia Fraud Against Taxpayers Act. The employee alleged three VTCC employees and the director of operations knowingly inflated hours spent providing services to children, including billing time for services provided while the minor patients were out of the country or no longer receiving treatment. As with most whistleblower lawsuits, the employee received a portion of the settlement as a reward.

In May of 2020, a North Carolina woman was found to have fraudulently billed Medicaid over $500,000 for inflated bills.[2] The woman was the owner and operator of United Medical Home Oxygen & Medical Supply, a Medicaid-enrolled medical equipment provider. When she sought reimbursement from Virginia Medicaid for a certain type of liquid oxygen container refills, Medicaid would reimburse Jackson for her actual oxygen cost plus 30 percent. From 2010 through April 2016, Jackson reported to Medicaid that her costs 45 to 78 times her actual cost of oxygen. From April 2016 through August 2017, Jackson inflated her costs at a rate of 22 times her actual cost of oxygen. By falsely reporting her actual oxygen costs, she improperly billed Medicaid $506,058.66.

Health care professionals, particularly those in billing departments, are ideally positioned to learn of Medicaid fraud. Both the federal and state government provide cash incentives and powerful protections for employees to bring a whistleblower lawsuit. If you are an employee in the healthcare industry who believes your employer is participating in a scheme to defraud Medicaid, we encourage you to contact our office.

[1] Virginia Mental Health Agency Agrees to Pay $263,280 to Settle Civil False Claims Act Lawsuit. U.S. Dep’t of Justice: U.S. Attorney’s Office Easter District of Virginia Press Release (Sept. 10, 2020). Available at

[2] Woman Sentenced to Prison for $500K Health Care Fraud Scheme. U.S. Dep’t of Justice: U.S. Attorney’s Office Easter District of Virginia Press Release (May 29, 2020). Available at


Bo Frith