Transcript How to Make $4.1Billion in 12 Months: Healthcare Fraud and

How to Make $4.1Billion in
12 Months: Healthcare Fraud
and Abuse Enforcement
Mark Bartlett
Davis Wright Tremaine, LLP
Why Is This Man Smiling?
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Health Care Fraud Enforcement: Top DOJ Priority
 Government recovered almost $4.1 billion in
health care fraud actions during FY11, up
58% percent from 2009
 More than 700 criminal convictions
"This is an unprecedented achievement -- and
it represents the highest amount ever
recovered in a single year," said Attorney
General Eric Holder
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Health Care Fraud Enforcement: Top DOJ Priority
 December 19, 2011 DOJ Press Release
– Over $3 billion in FCA civil settlements and
judgments in Fiscal Year 2011
• 2nd consecutive year over $3 billion
• $270 million HCF investigation funding increase FY12
 $2.4 billion recovered from fraud involving
federal health care programs
– Over $6.6 billion recovered under FCA since
January 2009
FCA: Settlements/Judgments
Settlements or Judgments in Cases Where Government Declines
Intervention As Percentage of Total FCE Recoveries
3500
$$ in millions
3000
2500
2000
1500
1000
500
Source: DOJ “Fraud Statistics – Overview” (Dec. 7, 2011)
Health Care Fraud Statutes
 False Claims Act (Civil)
– Imposes liability on any person who knowingly
submits, or causes to be submitted, a false or
fraudulent claim to the Federal Government
 Anti-Kickback Statute (Criminal)
– Prohibits knowingly and willfully offering, paying,
soliciting, or receiving any remuneration to induce
or reward referrals of items or services
reimbursable by a Federal health care program
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Health Care Fraud Statutes
 Stark Law (Civil)
– Prohibits a physician from making a referral to an
entity in which the physician has an ownership
interest or compensation arrangement
 Health Care Fraud (Criminal)
– Prohibits knowingly and willfully executing a
scheme or artifice to defraud any health care
benefit program
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PPACA Anti-Fraud Provisions
 Anti-Kickback Statute
– Codifies lower scienter
– Violation constitutes “false claim” under FCA
 False Claims Act
– Narrows definition of “public disclosure”
 Overpayments
– Providers must report and return any overpayment
within 60 days
 Increase provider exposure to administrative,
civil and criminal liability
2011 Health Care Fraud Criminal Enforcement
 September 7, 2011
– DOJ charges 91 individuals with Medicare fraudrelated offenses, including fraudulent billings over
$295 million, the largest single takedown in Strike
Force history
 September 16, 2011
– Lawrence Duran, the owner of a mental health
care company, American Therapeutic
Corporation, was sentenced to 50 years in prison
for orchestrating a $205 million Medicare fraud
scheme
Moving Beyond CIA’s Expansion of the Park Doctrine
 Inspector General Levinson – excluding corporate
officers influences corporate behavior without
impacting patient access to care
– 883 individuals and entities excluded 10/10 to 03/11
 Purdue Frederick Oxycontin prosecution
– $600 million criminal fines and civil sanctions
– Corporate executive misdemeanor pleas
• 4 months later, 20 year exclusion (reduced to 12)
 New Goal: Exclusion even where no guilty plea
A Brave New World: Fraud Detection in 2012
 CMS use of predictive modeling and
algorithms
 Electronic billing
 Stop pay first and ask questions later
CMS Benefit Integrity Contractors
 Recovery Audit Contractors
– Tasked with identifying and collecting improper
Medicare payments, paid on contingency basis
 Comprehensive Error Rate Testing
– Analyze error rate data and develop plans to
reduce improper payments
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Responding to Subpoenas
 Grand Jury Subpoenas
– Used in criminal cases only
– Determine if you are target or simply third party
 Parallel Proceedings
– Administrative Investigative Demands
– Get as much information as possible as quickly as
possible
 HHS OIG Subpoenas
Execution of a Search Warrant
 Always be polite and cooperative, but never
consent to expanded search or voluntary
interviews
– Inform agents that they are not to speak to
anyone
 Gain as much information as possible
– Ask the purpose of the visit
– Names and titles of all agents
– Copy of search warrant (mandatory) and affidavit
(discretionary)
– Monitor all items that are removed
We Are All Boy Scouts
 “BE PREPARED”
 Designate a single contact person to meet with
all government visitors
– In-house attorney, head of security, human
resources
• Have at least one back-up point person
 Ensures company speaks with one voice and
permits company to control documents
Never Talk to Strangers
 EDUCATE ALL EMPLOYEES
– Employees have the right to talk or not talk to
investigators
– Employees have the right to talk with counsel
before deciding whether to consent to a
voluntary interview
– Employees have the right to have counsel present
during any interviews
 Remember: it is the employee’s decision, not the
company’s decision, whether to consent to be
interviewed
The Best Defense
 A robust, real Corporate Compliance Program
can solve many problems
 Mandatory ethics training
 Commitment from the top
 Effective response to problems
Contact
 Mark Bartlett
Partner
Davis Wright Tremaine LLP
[email protected]
206.757.8298 direct
206.794.0705 mobile