"Domestic Care" refers to the health care services a hospital provides to its own employees.

Some hospitals charge their employees only what it actually costs the hospital to provide the service or supply.  

Other hospitals charge their employees at full retail but give the employees a discount off of the charges that is comparable with the discount it gives to other insurance companies in its market.  

Still others charge their employees full retail and give them little or no discount at all.

By paying itself at a higher rate the hospital is able to inflate its 'wage index' value and generate additional payments from Medicare.

The numerator of the 'wage index' is employee salaries and benefits (including health care).  

The denominator is the number of hours worked.

A US Department of Justice case was recently settled on the same issues and the whistleblower received $1.17 million.

Tuesday, October 4, 2016                                                                                                                                                                                


 PHOENIX – Yavapai Regional Medical Center (Yavapai), an Arizona not-for-profit community health system, has agreed to pay the United States $5.85 million to resolve claims that it violated the False Claims Act by misreporting data about the hours worked by its employees on its annual cost reports, which improperly inflated the amount of money it received from the Medicare program.

 “The United States Attorney’s Office has invested and will continue to invest significant time, effort, and resources in successfully enforcing the False Claims Act to hold health care providers, including hospital systems, accountable for false billings,” said U.S. Attorney John S. Leonardo.  “False bills to the Medicare program threaten the viability and effectiveness of the program, undermine public confidence, waste precious taxpayer dollars, and will not be tolerated.”

“Falsifying records and extracting unwarranted funds from Medicare will be detected and stopped,” said Christian J. Schrank, Special Agent in Charge for the Los Angeles Region of the United States Department of Health and Human Services, Office of Inspector General. “Medicare funds are intended to care for patients, not line the pockets of providers who submit false claims.”

The United States alleged that between 2006 and 2009, Yavapai misreported the hours worked by its employees, which inflated the wage index for the Prescott, Arizona area.  The United States alleged that the artificially inflated wage index was used by the Medicare program when it calculated the amount of the payments it made to Yavapai.  The United States also alleged that as a result of Yavapai’s false claims, federal health care programs paid substantially more than was warranted.  The settlement is neither an admission of liability by Yavapai, nor is it a concession by the United States that its claims are not well founded.

The settlement resolves a lawsuit filed in April 2016 by Gregory Kuzma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.  The case was filed in the United States District Court for the District of Arizona and is captioned United States ex rel. Kuzma v. Yavapai Regional Medical Center (CV-16-08072-PCT-JAT).  Mr. Kuzma will receive $1.17 million as his share of the settlement payment that resolves the qui tam suit he filed.

 The case was handled by the Commercial Litigation Branch of the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Arizona, and the United States Department of Health and Human Services’ Office of the Inspector General.

 Individuals with information regarding fraud, waste, or abuse related to Medicare or other federal programs are encouraged to file a complaint with the United States Attorney’s Office through the office’s website, http://www.justice.gov/usao/az/, or by calling (602) 514-7500.

 RELEASE NUMBER:    2016-088_ Yavapai Regional Medical Center

​My name is Joe Vincoli and I am a former Director of Managed Care at a hospital.

I have been working with John Schilling and Sal Barbera of Whistleblower Solutions since 2008 to address the 'domestic care' scheme which is being used by many hospitals across the country.  

John and Sal are both successful former Medicare whistleblowers (see here) who were rewarded by the US Government for stepping up and 'doing the right thing'.

If you are aware of a hospital(s), a provider owned PPO or TPA, or any claims payer that is engaged in such a scheme and you have factual knowledge concerning the rates that the hospital's employees are being charged as compared to other payers in the hospital's market, then you may be able to file a Medicare Whistleblower case.

These hospital plans usually have names like:  "XYZ Healthnet", or "Anytown Hospital Direct".  

If you have such information and knowledge about a hospital engaging in this scheme you could help your co-workers, taxpayers, and yourself by contacting Whistleblower Solutions at 239-598-5043 .


The information contained in this web site was prepared by Joe Vincoli and is provided for informational purposes only and is not intended to constitute legal advice. Joe Vincoli is not a lawyer.  EthicSolutions, LLC (dba, "Whistleblower Solutions") is not a law firm.  Any communications with Joe Vincoli or EthicSolutions LLC by email, telephone, or through this site is not intended to create any relationship whatsoever with Joe Vincoli or EthicSolutions LLC, and any information sent to Joe Vincoli or EthicSolutions LLC through their respective web sites or via email is not secure. EthicSolutions LLC will use any provided information to investigate and determine whether they wish to engage in a partnership with you and execute a written agreement. Until a written agreement is reached and executed by both parties EthicSolutions has no relationship with you.