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Investigations Regarding Health Care Fraud and Abuse

Investigations Regarding Health Care Fraud and Abuse

By Mitchell J. Birzon, Esq., Birzon Strang and Associates

Not a day goes by when the Office of the Inspector General (OIG) of the US Department of Health and Human Services doesn’t issue a press release regarding their successful prosecutions of fraud and abuse investigations regarding Medicare and Medicaid. Aside from the more commonplace matters involving practitioners having billed for services that were never performed, investigations involving upcoding and billing separately for services that should have been billed as a single service (connotatively known as “unbundling”), whistleblowers have become efficient “agents” of the government pursuant to The Federal False Claim Act, 31 USC Sec 3729-3733.

The enactment of The Affordable Care Act (ACA) brought with it additional funding and resources to identify and prosecute health care fraud, both civilly and criminally, at a greater level assisted significantly by technology. Algorithms can readily identify practitioners that seemingly oversubscribe medication or diagnostic service orders based upon geographical and other statistical databases that the Centers for Medicare and Medicaid Services (CMS) have compiled. While historically government investigations and prosecutions of health care fraud involved only matters where the government was the actual payor for the services at issue, it was anticipated that “test cases” would be commenced by the Department of Justice against beneficiaries of private insurer payments under the argument that coverage provided through the exchanges created pursuant to the ACA included providers subject to the ACA and its enacted rules and regulations.

At the federal level most fraud investigations are lead by the OIG, the FBI, DOJ and state Medicaid Fraud Control Units (of which 29 states, including New York have created) which often all join in the investigatory and prosecutorial process. Not surprisingly, a significant percentage of cases that are successfully prosecuted are borne from complaints filed by whistleblowers who often have the most intimate knowledge of the fraud and how it was perpetrated upon the government. The Federal False Claims Act, as do most state whistleblower statutes, allow for the whistleblower(s) to receive between 15-25 percent of the government’s recovery. (see 31 USC 3730 (5)d).  As an example, The Health Care Company, “HCA” paid the whistleblowers a total of $151 million as a result of HCA’s admission that it engaged in extensive physician kickbacks and the submission of fraudulent reports.

The initiation of an audit or investigation can be brought to a client’s attention in a variety of ways. For example, a notice from CMS or a CMS contractor may notify the client that they are already being investigated and that their claims are being subjected to a process where each claim is under review by CMS or a designated contractor before any claim gets paid. This designation is known as “pre-payment review” and may result in innocent clients having their Medicare payments delayed for 3-6 months.

Very often the small or mid-size health care practice that finds itself caught in the ever-expanding web of the regulatory jungle is unaware of the requirement that the practice must have enacted a compliance program.  In reality, the requirement is not new or a recent mandate. The requirement for a comprehensive compliance program transitioned from voluntary to mandatory in the Patient Protection and Affordable Care Act (PPACA) in 2010.  To be compliant with this requirement, I urge clients to make certain that their program complies with the specific recommendations issued by OIG. When a practice takes the time and makes the financial commitment to adopt and fully implement a quality compliance program, it has the effect of identifying or correcting inadvertent fraud and further sends a strong message to the government that the client truly tried to do the “right thing”; something that the government may take into account when deciding whether to bring criminal charges in addition to civil claims against the health care provider.

There is never a good reason for a client who is the subject of what may appear to be a relatively minor investigation of Medicare, Medicaid, or private payor fraud to proceed without counsel.  There is simply far too much at risk, and the extent of the risk is unknowable when an investigation first rears its head.

Mitchell J. Birzon, Esq., Birzon, Strang & Associates, 222 East Main Street,
Smithtown, NY 11787
631/265-6300, [email protected]

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