Top Health Care Fraud Legal Challenges

Settlements keep growing larger and larger and the strike force is going after big bad guys to shut them down.

Posted by Joe Gerard in Healthcare on November 26th, 2010

 

Settlements keep growing larger and larger and the strike force is going after big bad guys to shut them down. Here are my notes from Kirk Nahra’s NHCAA presentation “Top 10 Health Care Fraud Legal Challenges for SIUs.” Kirk is a partner at Wiley Rein.

The Big Picture:

  • Entering an environment where there are a lot of new legal and regulatory challenges for all participants in the health care industry.
  • There continues to be significant cost-related pressures on the government and the private sector in connection with the health care system.
  • Private health care companies face ongoing economic challenges related to both the general economic outlook and the ongoing questions about the health care industry.
  • Health care fraud is a major focus of attention for the federal government.
  • Health care providers remain the primary focus of attention and some recent efforts are directed exclusively at providers- ie. new strike force.
  • Medicare contractors and other government health care program participants are an increasing target of federal investigations.
  • These payers are also frequently called on as key sources of information about potential fraud.

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Health Care Reform:

  • Change always brings confusion. Change= new opportunities for fraud.
  • Fraudsters have been better at managing change than government or insurers- develop new schemes, implement them and move onto the next one quickly to make it harder to catch them.
  • Prosecutors are on high alert and change often makes them very creative.
  • There are significant concerns about the “triple whammy” involving health insurers.
  • There are a variety of provisions that are designed to put the new federal health care programs and the related programs being established by this legislation on the same footing for anti-fraud purposes as other federal programs,
  • New government anti-fraud efforts.
  • Expect more data-driven cases- new opportunities to gather and analyze data.
  • BUT there’s very little, almost nothing, in the health care fraud legislation that deals directly with the private sector’s role in the fight against health care fraud or that otherwise addresses fraud in connection with private health insurance programs.

Health Care Fraud Today:

  • Government is interested in:
    • Preventing fraud.
    • Punishing those who commit fraud.
  • There are an increasing set of area where health plans are entangled with groups that could be committing fraud or violating the laws in other ways.
  • Leads to an increasing number of complications where health plans can be victims, witnesses and perpetrators- and possibly all three in the same situation.

Overall Attitude Towards Anti-Trust Activities:

  • General recognition that money spent on anti-fraud efforts will result in overall savings.
  • Anti-fraud programs have become a significant element in the health care reform debate- as a means of cost-cutting with the expectation of making money on these investments.
  • Government’s Effort:
  • More money being thrown at health care fraud through numerous channels.
  • Continuing evolution of the use of anti-fraud contractors.
  • New tools that can be used to detect, investigate and prosecute.
  • Closing identified loopholes.

Issues Under Health Care Reform:

  • Likely to be even more enforcement efforts and new pressures for anti-fraud activities to really reduce overall health care costs.
  • Increased focus on compliance efforts- mandated compliance programs.
  • DOJ will be using the False Claims Act aggressively and in creative ways.
  • Does the government have “too much” power?
  • Most of the new provisions are directed at providers.
  • But, there’s increasing recognition that health insurers can be involved in fraud cases.
  • HHS Secretary is to determine, by regulation, the level of screening for provider enrollment according to the risk of fraud, waste and abuse, with respect to the category of the provider.
  • HHS can suspend payments to a particular providing pending and investigation of a credible allegation of fraud.

The HHS OIG’s Keys to Fraud Fighting:

  • Scrutinizing individuals and entities that want to participate as providers and suppliers prior to their enrollment in health care programs- don’t let phony clinics into your system in the first place.
  • Establishing payment methods that are reasonable and responsive to changes in the marketplace- some fraud is driven by the fact that payment practices are perceived to be unfair and fraud is committed to get around them.
  • Assisting health care providers and suppliers in adopting practices that promote compliance with programs requirements including quality and safety standards- front-end prevention, do you review compliance programs and documents?
  • Vigilantly monitoring programs for evidence of fraud, waste and abuse.
  • Responding swiftly to detected fraud, impose sufficient punishment to deter others and promptly remedy program vulnerabilities- too much attention paid to closing out cases without thinking about why it happened and how it can be prevented next time.

Compliance Programs:

  • Government placing an increased emphasis on front end prevention techniques- as opposed to pay and chase.
  • Leading to new efforts to mandate compliance programs.
  • or all participants in the health care industry.
  • Critical to focus attention on making sure your employees still pay attention to compliance issues.
  • It’s essential to respond to complaints quickly.
  • Address government inquiries, both formal and informal, as quickly and thoroughly as you can.
  • Try to build effective relationships with prosecutors and law enforcement.
  • Be responsive and proactive. Be prepared to educate on the rules and your business.

Insider Access:

  • There’s a clear problem in the health care industry of insiders mis-using their access to information.
  • You need to deal with this problem.
  • Should involve a mix of training, sanctions and audits/monitoring.
  • Medical ID theft- increasing problem with substantial new attention from regulators. Still lacks the attention it deserves.

Privacy Law Developments:

  • Privacy rules are changing again- so is enforcement.
  • This means there’s legitimate confusion and nervousness. Increased opportunities for people to manipulate the rules.
  • The basic HIPAA rules involving privacy aren’t changing. Vendors are now covered directly by the privacy rules.
  • Electronic Records- Don’t really know much about how these will impact health care fraud.

Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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