Describe a federal strike force that relies on informants, undercover officers, asset seizures, secret recordings and other tough tactics, and most Americans would assume the targets were mob bosses or drug cartels. But as two LeClairRyan attorneys noted in an Aug. 22 webinar, various U.S. agencies are doing all of the above as they target, not the mobsters of the world, but major and minor fraudsters in the healthcare business.
In "Healthcare Fraud Enforcement and Compliance Strategies," a one-hour webinar for compliance officers and other executives, LeClairRyan shareholders Michael F. Ruggio and Michael Volkov outlined how the government's ongoing crackdown translates into unprecedented risk of civil and criminal enforcement for a wide variety of healthcare organizations.
"The Justice Department's healthcare fraud initiative, which primarily focuses on Medicare and Medicaid fraud and off-label marketing cases, is one of the highest priorities of the current administration," noted Ruggio, who formerly served as senior trial counsel for the DOJ. "This initiative is itself the product of an unprecedented, coordinated effort involving DOJ, HHS and other agencies, which have teamed up to execute a multipronged strategy aimed at identifying, investigating and prosecuting healthcare fraud."
Given today's aggressive enforcement environment, healthcare providers and other entities must take action to ensure they are in compliance with existing laws on fraud and abuse, as well as those that are soon take effect, added Volkov, a former federal prosecutor. "Healthcare organizations need to dedicate adequate resources to the compliance function, prioritize training programs and encourage the prevention and deterrence of potential violations," he said.
During the webinar, the Washington-based attorneys examined current enforcement trends in the healthcare industry and provided detailed advice on effective approaches to compliance. The risks associated with violations, Ruggio noted, are high. "Today, prosecutors are successfully detaining defendants pending trial without bond or with high bonds," he said. "We have already seen four national 'takedowns' with arrests of more than 100 individuals, including doctors, nurses and other healthcare executives and employees." Last year alone, DOJ recovered more than $5.6 billion in civil and criminal healthcare fraud cases. Approximately $2.8 billion were the result of whistleblower complaints, an increase of $500 million over fiscal 2010. "Meanwhile, Congress has increased funding by nearly $1 billion to combat healthcare fraud and abuse," Ruggio reported. "The government has realized that for each dollar spent on enforcement it saves one-and-a-half times that amount."
Violations of the False Claims Act, in particular, are prime enforcement targets. "These typically involve billing for goods and services not supplied or rendered, and for 'upcoded' or medically unnecessary services and goods," Volkov said. "The government is on the lookout for illegal sales and marketing schemes, kickbacks and false cost reports as never before." And thanks to the Physician Payments Sunshine Act--new legislation that will take effect in January 2013--it will soon be necessary to record and disclose any payments or benefits to physicians, Volkov added. "Congress believes drug and device companies are flouting anti-kickback laws by enriching physicians and creating detrimental conflicts of interest," he explained.
An effective compliance program can reduce the number and extent of possible FCA violations, the attorneys advised. In some cases, these programs can help persuade the government not to intervene. Volkov and Ruggio stressed the need for companies to be proactively committed to a culture of compliance, with clearly defined standards and procedures. "Healthcare organizations need to dedicate adequate resources to the compliance function," Ruggio noted. "The program must have a procedure for ongoing risk assessments, along with elements such as a written code of conduct. Likewise, the pro- compliance 'tone at the top' from senior management must be strong and clear."
The webinar covers topics such as the role of the Chief Compliance Officer, training and communication, internal reporting systems, discipline for violations, proper response as well as various whistleblower-related considerations. "Documentation and systematic measuring of program performance are important, but so, too, is clear-eyed risk-assessment," Volkov said. "When it comes to Medicare, for example, pay attention to the most significant risk centers on billing and coding of services for reimbursement. No one can review every bill or watch over every employee, but basic compliance principles can be adopted to minimize risks."