New Enforcement Tools Promise More Investigations and Longer Prison Sentences Prosecutions for healthcare fraud have increased dramatically in recent years. The number of individuals charged with healthcare fraud increased almost 75%, from 797 in 2008 to 1,430 in 2011. Administrative enforcement actions are also increasing. In 2011, the Department of Health and Human Services (HHS) terminated 56,733 Medicare providers and suppliers and 4,850 Medicaid providers and suppliers based on enhanced validation investigations. According to the U.S. Department of Justice (DOJ), the government’s anti-fraud efforts recovered more than $4 billion in 2011. This is the second year in a row that healthcare fraud recoveries have exceeded $4 billion. The upward trend in healthcare fraud investigations, administrative actions and prosecutions is likely to continue as the federal government begins to implement the new anti-fraud provisions in the Affordable Care Act (ACA). For example, the use of independent contractors to monitor Medicare waste, fraud and abuse will now be expanded to include Medicaid, Medicaid Advantage, and Medicare Part D programs. The ACA also requires enhanced site visits to screen and verify the operations of healthcare providers and suppliers. The ACA gives government entities, including states, the Centers for Medicare and Medicaid Services (CMS), the HHS Office of the Inspector General (OIG) and the DOJ greater abilities to work together and share information so that CMS can exercise its authority to suspend providers and suppliers engaged in suspected fraudulent activity. Increased anti-fraud enforcement is having broad implications, even for those who are not at the center of the fraud. In February 2012, a joint HHS/DOJ Health Care Fraud Prevention and Enforcement Action Team (HEAT) investigation resulted in the arrest of a Dallas-area physician, the office manager of his medical practice, and five owners of home health care agencies on charges related to fraudulent claims for home health services. As a result of this criminal action, the CMS also suspended payment to 78 home health agencies in the Dallas area. In just the first two weeks of April 2012, the U.S. Department of Justice has recovered more than $200 million, including $137.5 million for overpayments to a managed care company, $42 million for improper payments to Inpatient Rehabilitation Facilities (IRF), and $18 million for improper payments to a supplier of diabetes testing and other products. A finding of fraud can have devastating consequences for physicians, hospitals, and other healthcare providers and suppliers. In addition to returning large sums of money to the government, a finding a fraud can result in civil penalties, exclusion from government programs, the loss of professional licenses, and significant prison time. In fact, the Affordable Care Act mandates much longer prison sentences for healthcare fraud -- between 25% and 50% longer than before for crimes involving $1 million in losses to the government. If you are facing an audit, site visit, government investigation or criminal charges, then you should consult with an experienced attorney immediately. We invite you to contact our office at (917) 652-6504 to discuss your options. John Howley, Esq. New York, New York The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.
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Suspiciously High Oxycodone Sales Trigger Enforcement Action The U.S. Drug Enforcement Administration (DEA) is investigating major pharmacy chains including CVS Caremark and Walgreens as part of a broad attack on prescription drug abuse. At the center of the investigations is oxycodone, a prescription pain medication that is often sold under the brand name OxyContin® or in combination with acetaminophin under the brand name Percocet®. In February 2012, the DEA suspended the registrations (also known as DEA Numbers) of two CVS pharmacies in Florida after an investigation into what it called “suspiciously high” sales of oxycodone. The DEA also suspended the registration of a Cardinal Health distribution center in Florida that supplied the two CVS stores. The suspensions mean that the two CVS pharmacies and the Cardinal Health distribution center cannot sell any controlled substances, not just oxycodone, until the suspensions are lifted and their DEA registrations are restored. The DEA widened its investigation in April 2012 to include six Walgreens pharmacies and a Walgreens distribution center, also in Florida. According to the DEA, it issued inspection warrants after noticing a jump in purchases of oxycodone at these Walgreens locations. The inspection warrants allow DEA investigators to review pharmacy records and receipts, but the pharmacies are not required to stop selling controlled substances during the inspection. For several years, the DEA has been fighting what it calls an epidemic of prescription pain medication abuse in Florida. On average, seven people die every day in Florida due to prescription drug abuse, according to the Florida Department of Law Enforcement. Deaths from narcotic painkillers now exceed those of heroin and cocaine combined. The traditional response to prescription drug abuse has been undercover operations targeting individual physicians and pharmacists running so-called “pill mills,” where drug dealers and addicts can obtain and fill prescriptions with little or no inquiry into their actual medical conditions. While these investigations have resulted in the arrest and prosecution of significant numbers of physicians and pharmacists, the DEA contends that “the sheer volume of practitioners and pharmacies make it impossible to significantly impact the problem by targeting physicians and pharmacies alone.” According to the DEA, “any effective strategy must address the problem at all levels, including distributors and suppliers.” Otherwise, the DEA says, enforcement actions against individual physicians and pharmacists “will only succeed in moving the problem around.” It is too soon to tell whether the DEA’s enforcement actions against legitimate pharmacy chains in Florida are isolated events in a state with an unusually large prescription drug abuse problem or the start of a new trend in DEA investigations and enforcement actions nationwide. The Walgreens pharmacies and distribution center in Florida are still in the investigation stage, and both CVS Caremark and Cardinal Health are challenging the DEA’s suspension orders in federal court. We will keep readers apprised of developments. In the meantime, if you are contacted by the DEA Office of Diversion Control, or other state or federal investigators, we invite you to contact our office at (917) 652-6504 to discuss your options. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. I invite you to contact our law offices and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. I practice law and offer legal services only in jurisdictions where I am properly authorized to do so. I do not seek to represent anyone in any jurisdiction where this web site does not comply with applicable laws and bar rules.
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John Howley, Esq.
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