As a healthcare ethics keynote speaker and healthcare ethics consultant, I know it is all-too-easy to point out ethical miscues and out-and-out fraud within the industry. In this most, I want to spotlight two nurses who did the right thing.
Realizing my audience is made up of people who are both “pro and con” on issues such as contraception, I would ask the actions be reviewed within the context of people trying to do the right thing and having the beliefs to stand-up against a corporation.
The Pill Club
The organization was formerly known as The Pill Club before they branched out to cosmetics and personal care products. It is more popularly-known as “Favor.” The name change may have also been influenced by Cindy Swintelski Schwartz and Happy Baumann who were employed there as nurse practitioners.
The nurses sought legal counsel when they realized the company was (according to the California Department of Justice):
“Defraud(ing) government and private insurers by submitting false claims for contraceptive prescriptions and services that were knowingly in violation of law… they alleged that the company knowingly and routinely defrauded public and private insurers by failing to provide required physician supervision for contraceptive services and by over-billing for contraceptive products.”
The nurse practitioners specifically helped the government establish six charges against the organization:
- Billed for female contraception, e.g., condoms, in excess of what was deemed medically necessary.
- Billed for emergency contraceptives in excess of what was medically necessary.
- Billed for improperly coded telemedicine visits.
- Used billing codes that inaccurately reflected the amount of time providers spent with patients (they spent virtually no time with patients).
- Used place of service modifiers that falsely indicated an in-person visit occurred at a healthcare provider’s office (the organization worked virtually and remotely).
- Billed for prescriptions dispensed by a pharmacy not licensed to provide pharmacy services to California patients.
The lawsuit brought forward by the nurse practitioners goes back to 2019. When the case was successfully concluded, The Pill Club paid fines of $15 million to the California DOJ and $3.275 million to the California Department of Insurance. The whistleblowers received about $4.5 million for their role in uncovering the scam.
Said Attorney Anderson Berry of the Arnold Law Firm:
“Ms. Baumann and Ms. Schwartz stood up for what is right. I hope more medical professionals in this field stand up and let us know who else is committing these frauds against women and their government or private insurers.”
And, that is the issue
In a world that is increasingly virtual, where rules have been relaxed and (unfortunately) expectations lowered, it is far too easy to overlook the importance of ethics. If I review the six points stated above, it is disturbing how far out of the patient-provider relationship the company was conceding in the attempt to make a profit.
In its most basic sense, the company was allegedly billing insurers for medications and contraceptive products as though the patients were followed by physicians and/or receiving in office visits. In addition, the company was seemingly willing to circumvent pharmacy licensing. To make matters worse, the company allegedly overbilled the insurance system for virtually all services.
These crimes are not victimless. Clearly, while the company played it lose with its telemedicine services, it got lucky to the point to where no one died. However, the entire insurance system was scammed with this fraud, especially in the State of California. The money, of course, comes from “us.”
“Favor” still exists as a company and a medical doctor is still in charge. The Whistleblowers did their job however, I would hate to thin what might have happened if they had lacked the courage,
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