By: Richard A. Merlino, Guest Contributor
Healthcare fraud abuse comes in a variety of shapes and sizes, ranging from the simple filing of a false Medicare claim to grand schemes arranging kickbacks (i.e., payment by one party to another for having referred business or otherwise produced income for the payer). Similarly, the typical conception of “culpability” for the commission of healthcare related criminal acts varies dramatically across a variety of Federal criminal statutes enacted to protect against fraud.
For instance, one may be criminally liable under the Federal Anti-Kickback provisions for receiving benefits “directly or indirectly”, “overtly or covertly”, and “in cash or in kind”. Accordingly, although knowledge of receipt of benefit is a necessary element, the Government may seek a conviction even where “indirect” “non-cash” benefits are received. Along the same lines, Federal healthcare laws are comprised of more than merely criminal statutes, which provide a harsh deterrent to fraud and ensure legal compliance. Federal law also provides a complex framework of civil protection (under statutes such as the False Claims Act) and administrative penalties (such as suspension of licensure) to supplement the criminal provisions effecting healthcare fraud and administration.
These federal schemes are enacted to prevent against the clear and obvious financial effects of healthcare fraud. Although monetary effects of fraud are most glaring, the substantial impact of healthcare fraud is far beyond merely financial. In fact, some studies have suggested that approximately 10 percent of the federal healthcare budget is lost to fraud each year. These financial effects are obvious, and not understated, but in reality the impact of healthcare fraud, particularly to doctors and medical administrators is, beyond financial.
Perhaps the most impactful, nonmonetary effect of healthcare fraud is incarceration. Criminal statutes on the state and federal level carry harsh penalty provisions to increase deterrence. For instance, the Anti-Kickback statute referred to above dictates that a person engaging in the statutes prohibited conduct is guilty of a felony and upon conviction shall be imprisoned not more than ten years. The same statute subjects the violator to a fine not greater than $100,000.00. In addition to incarceration however, the violator will be forever burdened with the stigma of a felony conviction and its ancillary consequences.
These ancillary consequences can be as stark and debilitating as incarceration itself. For example, nearly all job applications contain an inquiry with respect to criminal history. Violators of federal healthcare criminal statutes will be required to report their conviction and felon status to future employers. In addition, a vast majority of medical professionals are required to undergo background checks, which a felony conviction would surely hinder or defeat. Similarly, individuals convicted of a felony automatically forfeit important civil rights such as the privilege to run for office; to possess a firearm; to serve on a jury; profound immigration implications for noncitizens; the ability to obtain some social benefits and housing; and to vote.
Next, and regardless of the outcome of federal healthcare fraud criminal proceedings, those suspected to have violated federal healthcare fraud statutes may be subjected to administrative penalties. These penalties often include suspension of license, or revocation of license. Such outcomes are devastating given the time, effort, and monetary investment endured by medical professionals in the pursuit of their medical license.
Finally, those convicted of healthcare related fraud may be required to pay restitution, in addition to any other sentence imposed (incarceration, probation, and/or fines). The government may be entitled to seek restitution for damage directly caused by the criminal conduct of the offender. There is no statutory limitation on the amount of restitution that the government may seek and so restitution amounts may far exceed any potential statutory fine. The effects of these monetary penalties combined with the inability to work, find work, or maintain licensure can put the healthcare professional in a precarious position with respect to other aspects of his or her life as well.
Ultimately all of these consequences, both financial and beyond can be avoided by compliance with the vast and complex web of civil, administrative, and criminal laws directed toward preventing and punishing healthcare fraud. Engaging in proactive compliance methods such as training, education, and seeking legal advisement as to particular practices is one such tool. With growing enforcement trends, vast monetary impacts and increasing congressional prevention efforts- healthcare fraud is a subject that all medical professionals must be aware of. Failure to heed to the vast web of rules and regulations governing the topic can have avoidable, but far reaching effects.