Healthcare Fraud Prosecutions Increase Dramatically

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

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