By: Jeff Cohen
In the “good old days” (in healthcare, that means more than a week ago), it was understood that if a client didn’t accept any state or federal healthcare program dollars (e.g. Medicare, Medicaid, CHAMPUS, TriCare, Supp Plans), they would not expect to get a “knock on the door” from any federal regulatory authority. No federal or state healthcare program dollars used to mean the client would only tend to hear from state regulators or commercial payors. Those days are done!
Federal law enforcement is increasingly pursuing alleged criminal wrongdoing in the “non-government” healthcare space. One of their favorite weapons is 18 U.S.C. 1347, the Federal Healthcare Fraud Statute, which gives federal law enforcement broad enforcement authority with respect to suspected wrongdoing involving interactions between healthcare providers and commercial insurers.
The Fraud Statute states:
(a) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.
(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section. [Emphasis added].
It is a criminal statute with severe consequences.
According to the Department of Justice, the law was used 377 times in 2013, and the lead investigative agency is the FBI (as opposed to HHS, for instance). The DOJ’s listing of the top 10 districts shows Florida ranking #2, just behind Illinois.
Some of the most common uses of the law pertain to (1) billing Medicare or Medicaid for services that were not performed, (2) billing a noncovered service as though it was covered, (3) changing medical records, (4) improperly reporting diagnoses to increase payment, (5) modifying medical records to increase reimbursement, (6) forging or selling prescription medication (7) getting unnecessary prescription drugs and selling them, (8) misrepresenting when or where services were provided, (9) waiving copays and deductibles, and (10) overutilizing services. The law is often one tool in an indictment that can include allegations of wire and mail fraud (in connection with submitting improper claims).
Physicians and facilities that provide healthcare items or services must be vigilant to comply with applicable healthcare laws. Periodic self-auditing and specific compliance plan development is a pro- active way to avoid being surprised.