October 29, 2015
Article by David Glusman, Advisory Services Partner and Thomas Reinke, Advisory Services Manager, "Federal Government Expands Health Care Anti-Fraud Efforts," Featured in The Legal Intelligencer
The federal government is expanding its health care fraud efforts on both the criminal and civil sides, signaling a much more aggressive effort to pursue actions under the False Claims Act and the federal Anti-Kickback Statute. The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services announced it is creating a new litigation team dedicated to pursuing civil penalty and exclusion cases. At least 10 attorneys will be dedicated to enforcing the OIG's guidance on fraud matters and pursuing cases that the U.S. Department of Justice (DOJ) does not pursue.
As part of its stepped-up efforts, in June the OIG issued a fraud alert aimed at warning physicians about financial arrangements that can create risk of litigation under the federal Anti-Kickback Statute. The alert highlighted 12 civil, monetary penalty settlements with physicians who had a variety of financial arrangements with hospitals, home health agencies and other entities.
Separately, in June, the DOJ announced its largest-ever health care fraud takedown in terms of loss amount and number of arrests. That nationwide sweep resulted in the arrest of 243 physicians, nurses and other licensed professionals for an alleged $712 million in false Medicare billings.
While the OIG will pursue smaller and simpler cases through the civil channel, the DOJ apparently is targeting high-dollar fraud situations. The DOJ started down this path in 2013 with the landmark U.S. Court of Appeals for the Fourth Circuit case United States ex rel. Drakeford v. Tuomey, No. 13-2219, against the Tuomey Healthcare System. Tuomey's fraudulent scheme involved part-time employment arrangements with 19 physicians who were required to refer all of their cases to Tuomey facilities in exchange for compensation that exceeded fair market value or the test of commercial reasonableness. Thus, the compensation amounted to payment to the doctors for their referral of patients.