Transcript What Every Physician Needs To Know About Fraud And Abuse …

What Every Physician Needs To Know
About Fraud And Abuse Laws
(But Is Afraid To Ask)
Steven H. Cohen
Cohen Law Group
an affiliate of the Whistleblower Legal Center
55 West Wacker Drive, Suite 801
Chicago, Illinois 60601
[email protected]
www.whistlelaw.com
(312) 327-8800 Phone / (312) 327-0266 Fax
I. What Do Fraud And
Abuse Laws Cover?
I. What Do Fraud and Abuse Laws Cover ?
 Areas of Governmental Concern
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Additional Costs to Health Care Programs
Quality of Care
Access to Care
Patients’ Freedom of Choice
Competition
Health Providers Abuse of Professional
Judgment
I. What Do Fraud And Abuse Laws Cover?
Its ALWAYS about the money
A. The Wrongful Receipt of
Federal or State Funds
B. The Presentment of a False Claim for
reimbursement
C. Improper relationships among
referral sources
II. Who Can Prosecute?
II. Who Can Prosecute ?
A. Federal
1. US Attorneys Offices Throughout the Country
Civil Division
Criminal Division
2. Department of Justice - Civil Fraud Division
(Washington, D.C.)
3. Federal Agencies
 Centers for Medicare and Medicaid Services (“CMS”)
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(formerly HCFA)
Office of Inspector General
Federal Bureau of Investigation
Federal Employee Health Benefits Program
II. Who Can Prosecute ?
B. State
1.
2.
3.
4.
5.
Attorney General
State Agencies
Inspector General
State Regulatory Agencies
State Medicaid Fraud
Control Units
II. Who Can Prosecute ?
C. Private Whistleblowers
D. Private Insurers
(Illinois and California)
E. Consumer/Class Action Plaintiffs
(i.e. medicaid/medicare/private insured
beneficiaries/self pays)
III. How Can They
Prosecute?
III. How Can They Prosecute ?
A.
B.
C.
D.
Criminal Actions
Civil Actions
Administrative Proceedings
Privately Funded Class Actions
IV. What They Prosecute
IV. What They Prosecute
Traditional Areas
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Inadequate medical
documentation
Improper use of CPT
codes (i.e., “upcoding”)
Billing for services or
procedures that were
not performed or not
medically necessary
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False certifications to
the Government
“Special” billing
policies for Medicare
and/or Medicaid
patients
Fraudulent cost
reporting
IV. What They Prosecute
Emerging Areas
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Substandard quality of
medical care
Physicians billing for
services performed by
RN’s/Physician
Assistants
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Payments, discounts or
other “special arrangements” between
providers
Kickbacks and illegal
referrals
Pharmaceutical Fraud
V.
How Physicians
Become Targets of
Enforcement
Actions
V.
How Physicians Become Targets Of
Enforcement Actions
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E/R Physicians
Attending Physicians
Drug Company Cases
– Receiving end of
“Kickbacks”
Quality of Care –
Kickbacks, Referrals
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Physician Practices/3d
Party Billers – Physician
Management
Companies
Whistleblowers
Credentialing Problems
Competitors
VI.
Key Federal and State
Fraud and Abuse
Enforcement Laws
(The Tools of the Trade)
VI.
Key Federal and State …Laws
A. The Federal False Claims Act
31 USC §§3729 et. seq.
VI.
Key Federal and State …Laws
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U.S. Attorneys Love It : Government’s Most
Powerful Enforcement Tool
1995-2003 over 8 Billion recovered by the
Government (and counting!)
Over 2.1 Billion recovered in 2003!
@ 6 Billion from whistleblower cases
70% - Health Care Fraud
20% - Defense Procurement
10% - Other (Emerging areas)
VI.
Key Federal and State …Laws
B. State False Claims Acts
Arkansas
California
Delaware
District of Columbia
Florida
Hawaii
Illinois
Louisiana
Massachusetts
Nevada
Tennessee
Texas
Virginia
Utah
?????
VI.
Key Federal and State …Laws
C. Stark Act/Anti-kickback
Laws (Federal)
VI.
Key Federal and State …Laws
D. Medicare Anti-Kickback
Statute
Prohibited Conduct
- knowing/willful solicitation or receipt
or offer or payment of
remuneration
VI.
Key Federal and State …Laws
E. Key Issues Under the
Anti-Kickback Statutes
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Joint Ventures
Commissioned Sales
Representatives
Service Agreements
Leases
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Discounts
Group Purchasing
Organizations
Physician
Recruitment
VI.
Key Federal and State …Laws
F. Medicare Anti-Kickback
Statute
-Penalties
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Criminal fines & imprisonment
Civil money penalty of $50,000 plus
3X the amount of the remuneration
Exclusion
(False Claims Act liability)
VI.
Key Federal and State …Laws
G. Criminal False Claims
Statutes
1. Medicare/Medicaid-specific statutes
(42 U.S.C. §1320a-7b)
 False claims
 False statements
 Failure to refund
VI.
Key Federal and State …Laws
G. Criminal False Claims Statutes
(cont.)
2. Federal Health Care Offenses
 Scheme to defraud health care benefit
program (18 U.S.C. §1347)
 False statements relating to health care
(18 U.S.C. §1035)
 Obstruction of health care offense
investigation (18 U.S.C. § 1518)
VI.
Key Federal and State …Laws
G. Criminal False Claims Statutes
(cont.)
 Conspiracy to defraud the
Government (18 U.S.C. §371)
 False statements (18 U.S.C. §1001)
 Mail fraud (18 U.S.C. §1341)
 Wire fraud (18 U.S.C. §1343)
 RICO (18 U.S.C. §§1961-64)
 Money laundering (18 U.S.C. §1956)
VI.
Key Federal and State …Laws
H. Deceptive Trade Practice
Act/Consumer Fraud Act
(State)
VI.
Key Federal and State …Laws ?
I. Administrative Rules
and Regulations
(Federal and State)
VII. Fraud/Abuse
Enforcement Under
False Claims Act Laws
VII. Fraud and Abuse Enforcement Under False
Claims Act Laws
A. Broad Based Coverage
 Any person who knowingly presents or causes a
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presentment of a false claim for approval or
payment
or knowingly makes or cause to be made a
false statement to get a false claim paid or
approved
Any false or fraudulent claim for payment
Statute is liberally construed
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 All other fraud and abuse laws
feed into the FCA
VII. Fraud and Abuse Enforcement Under False
Claims Act Laws
B. A Relaxed Proof of Fraud
Knowingly—
(1) actual knowledge
(2)deliberate ignorance
(3)reckless disregard of the truth
* No proof of specific intent is required
* Mere negligence or innocent mistake
generally not enough
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
C. Powerful Remedies for
Violations
1. Civil/Criminal Penalties
2. Treble Damages
3. Court Imposed/Government supervised
compliance problems
4. Exclusion/Limitation of Participation in
Government Health Care Programs
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
D. Civil Damages
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Liability
- 3X actual damages
- $5,500 to $11,000 per claim
- Equitable relief
- (attorneys fees)
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
E. SAMPLE PENALTY
CALCULATION
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$100,000 damages X 3 = $300,000
2000 (# of claims) X $11,000 =$22,000,000
Total Liability = $22,300,000
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
F. Exclusions
 Mandatory
Exclusion
 Permission Exclusion
 Felonies relating to
fraud
 breach of fiduciary duty
 obstructing an investigation
 Misdemeanor for program
violations
 If OIG concludes you have:
1. failed to disclose
required information
2. failed to grant
immediate access
to investigators
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
G. Government Initiated Actions
VII.
Fraud/Abuse Enforcement Under False
Claims Act Law
H. Whistleblower Initiated
(Qui Tam Lawsuits)
private individuals who have non-public knowledge of
fraudulent practices by a person against a government
agency resulting in the government paying more than
it should have or not receiving the value it expected.
VIII. Special Focus:
The Whistleblower
Initiated Lawsuit
(Qui Tam Lawsuits)
VIII.
…Whistleblower Initiated Lawsuits… ?
Whistleblowers
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“Private Attorney Generals”
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Whistleblower can receive up
to 30% of recovery
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Whistleblower can proceed
even if Government declines
VIII.
…Whistleblower Initiated Lawsuits…
A. Who Can Be A
Whistleblower?
 Governed by Statute:
Federal or State law
 Individuals: Person,
persons, or entity;
employee, competitor,
former employee or
contractor (called the
“Relator”).
 Non-Public:
Typically insidertype info but
doesn’t have to be.
 Knowledge:
Typically personal
knowledge.
VIII.
…Whistleblower Initiated Lawsuits…
B. Who May Sue?
“Any person” with non-public (inside) information
 Employees, ex-employees
 Competitors, former business partners, colleagues
VIII.
…Whistleblower Initiated Lawsuits…
Qui Tams Are Increasingly Brought by
Competitors & Former Business Partners
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Dr. A Sells His Practice-and
Knows How the New Group
Bills
Terminated ER Group Sues
Hospital-Which Then Claims
Docs Were Fraudulently
Billing as a Defense to the
MDs’ Damage Claims
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Competitors Who “Do It
Right” Tire of Shady Practice
By “Bad Apples”
Pharmaceutical Reps Lower
the Boom on Their
Competitors’ Marketing
Practice
Insurers Go After Abusive
Providers
VIII.
…Whistleblower Initiated Lawsuits…
C. Why Someone Blows
The Whistle?
 Competitor Suits
 Best Defense is a Good
Offense
(Evening the
(Staff or at a Hospital)
Playing Field)
 Clean Up The Industry
 The Bounty
 Vindication
(Millionaires)