The U.S. health care system is one of the most highly regulated industries in the nation. Federal and state laws govern physicians’ practices in every area of their operations, from billing and reimbursement to patient documentation and everything in between. While attorneys and other professionals who specialize in these laws and others and work in the system regularly assist physicians in understanding and complying with these laws, even the most minor infractions and misinterpretations can put physicians, nurses, and hospital administrators and managers at significant risk. Knowledge of allegations involving fraud in the practice of medicine is critical not only to ensure compliance with the law, but also to protect one’s livelihood, reputation, and even liberty.
Due to the increased intensity of enforcement over the last ten years, the numbers of claims fraudulently submitted and processed in the practice of medicine have skyrocketed. Because the complexity of these investigations is substantial and the potential consequences for the targets of these investigations are extremely serious, it is critical for the targets to adopt a more proactive approach. The importance of understanding the laws surrounding fraud in medical care has also increased.
Prosecutors often begin investigations based on patterns of billing (i.e. data analytics, whistleblower reports, etc). If billing is inconsistent with peer providers or if a whistleblower report is filed, a provider will be investigated.
Fraud in the Healthcare Sector: Civil and Criminal Charges
Healthcare fraud can be processed as both a civil and criminal case. Civil fraud cases may result in financial penalties and/or restitution and a permanent ban on participation in federal healthcare programs. Most criminal cases include severe fines and the likelihood of spending time in jail.
Criminal fraud cases require proof of fraud and that the defendant acted willfully and with criminal intent. Other actions (besides fraud) that can be taken include conspiracy, wire fraud, mail fraud, and violations of fraud in healthcare statutes. Defendants can face prison time and loss of professional license(s) as well as damage to their reputation that can be long-lasting.
It is important to understand the difference between civil and criminal exposure. An investigation can begin as a civil audit, but if the government finds evidence of purposeful misconduct, it can turn criminal.
Common Triggers for Investigations
Healthcare fraud investigations begin silently and may involve some specific triggers. In the least serious cases, a medical practitioner may receive a document request, audit notice, or even a subpoena. In more severe cases, federal agents may come to a practice to conduct a search.
Common triggers include abnormal billing patterns, billing and reimbursement rates out of the ordinary, overutilization or excessive billing code and billing aggravation of patients. Additionally, a whistleblower (who can be an employee or a competitor) can file a claim under federal statutes that provide a reward for reporting suspected fraud activities.
Moreover, the sophistication of fraud detection has increased due to the collaboration of enforcement agencies (Department of Justice and the Department of Health and Human Services). Also, an integrated data analysis system is capable of identifying anomalies long before a service provider is aware of the problem.
The Importance of Compliance Programs
One of the best ways to reduce the likelihood of fraud is to implement a comprehensive compliance program. All medical practices should develop specific internal procedures for billing, coding, documentation, and reporting. Compliance training should be conducted routinely to reinforce these internal procedures and to facilitate the early recognition of potential fraud.
Internal audits can pinpoint problems before they get worse. Quick response to issues raised shows goodwill and could lessen penalties. Sound management practices include complete records and regular reviews.
Comprehensive compliance programs can help avoid investigations and serve to lower claims of noncompliance. These programs help defend providers in the event of allegations.
Allegations and Investigations
Healthcare providers facing an investigation for healthcare fraud, must take steps to address the situation. Managing the situation without an attorney can make the situation worse. Investigative statements, document submissions, and internal communications can determine the ultimate outcome.
The early involvement of an experienced Healthcare Criminal Defense Lawyer is the best way to protect rights and make informed decisions. Counsel can evaluate the allegations, control communications to the government, and devise a defense plan for the specific case. The involvement of experienced counsel is essential in complex cases with federal prosecutors and regulatory agency representatives.
Healthcare providers under investigation should limit discussions to the bare minimum and avoid unnecessary conversations. Following this, as well as legal guidance, is the best way to avoid complications.
Professional and Personal repercussions
Beyond legal ramifications, fraud in the healthcare sector can end one’s career in the field. Disciplinary action may be taken by licensing boards even if no criminal action is pursued. Privilege suspensions may occur within healthcare systems, and provider contracts can be terminated by insurance companies.
Regardless of the outcome, the loss of reputation can be tremendous and remain long after the case is closed, regardless of the guilt or innocence of the provider. Confidence can be lost among patients, peers, and referral networks, which can lead to practice closure.
There is a possibility of serious legal and financial repercussions. Legal defense costs can become substantial, and the economic strain of lost income during incarceration or suspension can be long lasting. Legal costs, fines, and payments for restitution can also be the source of substantial strain.
Action for Medical Professionals
Instead of being reactive, being proactive has its advantages. Medical professionals are encouraged to take steps to prevent issues before they happen. Each patient encounter should have appropriate and complete documentation. Staff should be trained as rules and regulations change, and billing and coding should remain consistent with the evolving regulations.
Incentives, whether positive or negative, should not influence clinical decision-making. Providers may become liable if they accept gifts, referral payments, or other kickback-like incentives. Legal consultation should be pursued if there are arrangements that could cause concern.
Medical practice leaders should foster a culture of openness and ethical accountability. Creating a safe internal reporting environment to encourage employees to voice concerns and to diminish the likelihood of concerns turning into external whistleblower complaints.
Understanding Fraud and Abuse Laws
The complexity and obscurity of healthcare fraud laws requires careful navigation which, in some cases, is accompanied by a dry and complex revision of the law. The latest laws, enforcement guidelines, and reimbursement frameworks revisions directly affect healthcare providers’ compliance. Consequently, medical professionals must remain educated and flexible.
Education continues to be the best method to control and mitigate compliance risks. The principle of compliance as a process, rather than as a singular event, is the best method to stave off enforcement actions.
The legal risks of litigation for fraud and abuse allegations for healthcare providers is a way to protect providers, not anticipate reckless fraud and abuse. Furthermore, taking the initiative to remain informed, organized, and retain counsel in advance of legal action is a basis for a fraud and abuse defense.
The Impact on Your Career and Reputation
Healthcare fraud is a significant legal and compliance challenge for healthcare providers. The combination of criminal and civil liability, loss of a medical license, and significant negative consequences on a physician’s career is the dominant threat. However, with sound risk compliance frameworks, thorough legal counsel, and appropriate documentation, a physician can mitigate the liability.
The long-term commitment to patient care by medical professionals is admirable. Defending that commitment requires as much attention to the practice’s regulations and potential legal issues. Knowing the breadth of the laws surrounding healthcare fraud and addressing issues promptly as they arise will protect the provider’s practice and their future.