Health care fraud is a "white-collar crime" involving the filing of dishonest health care claims in order to turn a profit: the FBI estimates that Health care fraud costs American tax payers $80 billion a year. Health care professionals and institutions must comply with extensive and onerous civil regulations, and failure to comply can eventually result in federal prosecution.
Fraudulent health care schemes come in many forms; prosecutors aggressively pursue health care providers who allegedly get paid for services they do not provide or lie about the number of patients served or the services rendered, as well as patients who may provide false information when applying for programs or services, forge or sell prescription drugs, use transportation benefits for non-medical related purposes, or use another’s insurance card.
Physicians may even be prosecuted for referring patients to a facility or institution in which they have a financial interest: such physician self-referral is explicitly banned under federal criminal law.
During the course of healthcare fraud investigations, agencies often request billing records, financial statements and information about patient care. In some cases, even if a doctor or medical equipment supplier hasn't committed fraud, poor record-keeping or even panic may lead them to destroy records or secure files away from investigators; destroying, removing, or withholding files can constitute an obstruction of justice and even though the accused may be acquitted of fraud charges they could be charged with obstructing justice.
When a health care fraud is perpetrated, the health care provider passes the costs along to its customers. Because of the pervasiveness of health care fraud, statistics now show that 10 cents of every dollar spent on health care goes toward paying for fraudulent health care claims.
Congressional legislation requires that health care insurance pay a legitimate claim within 30 days. The Federal Bureau of Investigation, the U.S. Postal Service, and the Office of the Inspector General all are charged with the responsibility of investigating healthcare fraud. However, because of the 30-day rule, these agencies rarely have enough time to perform an adequate investigation before an insurer has to pay.
Prescription fraud:
Prescription fraud criminal charges are most often filed against people suffering from chronic pain and serious medical problems. Though legal consequences for drug charges can be severe, alleged violators of prescription medication laws often experience leniency from the court system when working with a thoroughly prepared criminal defense attorney because:
- The accused is often facing his or her first criminal offence
- Prescription fraud rates low in the courts' "culpability index" because no one was injured or suffered significant loss because of the alleged crime
- The courts tend to be lenient on defendants driven to commit crimes because of excessive physical pain
- Addictions to painkillers are the most common reason people commit prescription fraud. In fact, most people who commit this crime have been legally prescribed the medication in the past for a specific medical purpose then become addicted.
It is illegal for anyone to alter a prescription written by a medical doctor. For example, a person cannot increase their prescription or change the type of medication they were prescribed. People are also caught phoning in fake prescriptions and impersonating medical personnel. Another common type of prescription fraud is forging the label.
If you are prescribed a medication from one doctor, it is illegal to visit other doctors in an attempt to try to get more prescriptions written for you. This is called doctor shopping and it is illegal. There have also been cases where medical staff or patients steal blank prescription pads. With the advent of the Internet, some people try to get their prescriptions filled online in a fraudulent manner.
False billing or filing duplicate claims for the same service:
The Offices of Medicare and Medicaid Management reviews recipient utilization and investigates other charges of fraudulent behavior in order to take action against them. The federal government is vigilant in trying to catch institutions trying to bill for services not rendered, creating fraudulent cost reports, making kickbacks or self-referrals, etc. They frequently assemble thorough, well-researched health care fraud cases.
Medicaid/Medicare Provider (Medical Office) Fraud:
- Billing for services that were not provided, e.g., a chest x-ray that was not taken.
- Duplicate billing which occurs when a provider bills Medicaid and also bills private insurance and/or the recipient.
- Requiring the recipient to return to the office for more visits when another appointment is not necessary.
• Taking unnecessary x-rays, blood work, etc.
- Upcoding, e.g., providing a simple office visit and billing for a comprehensive visit.
- Having an unlicensed person perform services that only a licensed professional should render, and bills as if the professional provided the service.
- Billing for more time than actually provided, i.e., counseling, anesthesia, etc.
- Billing for an office visit when there was none, or adding additional family members' names to bills.
- Accepting payment from another provider, including sharing in the reimbursement paid by the Medicaid program, as a result of referring a patient to the other provider.
Altering or failure to keep proper records:
The Health Insurance Portability and Accountability Act (HIPAA) created a national standard for protecting the privacy of patients' personal health information. The law requires healthcare entities that use electronic means to process transactions, which include health information, to use standardized forms and a universal code system for illnesses and treatments. The regulation also requires safeguards to protect the security and confidentiality of an individual's protected health information.
Deliberately breaking HIPAA's rules could undermine member trust and could place staff and the organization at risk for penalties under HIPAA as well as other laws.
- HIPAA allows both civil and criminal penalties, including fines and possible time in jail.
- The Office of Civil Rights of the Department of Health and Human Services enforces civil violations, and the Department of Justice enforces criminal violations of the HIPAA Standards.
- Civil penalties are usually monetary fines. HIPAA allows fines of up to $100 for each violation of the law, to a limit of $25,000 per year for violations of the same requirement.
- Criminal sanctions for knowing misuse or disclosures of PHI carry fines of $50,000 to $250,000 and one to ten years imprisonment.
Accepting or giving kickbacks for member referrals, waiving member co-pays, or prescribing additional or unnecessary treatment:
In 1972, Congress passed the anti-kickback statute which made it illegal for providers, including doctors, to knowingly and willfully accept bribes or other forms of remuneration in return for generating Medicare, Medicaid or other federal healthcare program business. Likewise, a physician cannot offer anything of value to induce federal healthcare program business. Since its creation, the anti-kickback statute has been revised to allow more than 20 exceptions or “safe harbors” such as for investments in group practices.
The safe harbor rules cover such activities as investments in publicly traded companies, joint ventures, rentals of space or equipment, personal services agreements, sales of practice, discounts and other arrangements. The OIG has since issued a final safe harbor for managed care arrangements involving particular price reductions and enrollee incentives. Several proposed safe harbors that include exceptions for investment interests in rural areas have not yet been finalized.
Conduct that falls outside a safe harbor does not mean an individual or entity automatically has violated the law. However, compliance with the safe harbor requirements will protect a transaction from anti-kickback scrutiny by the OIG and the Justice Department. ACR members should carefully evaluate the unique facts and circumstances of each arrangement in their local jurisdictions with their practices' legal counsel.
Recent federal legislation has expanded the scope of the anti-kickback law and its penalties. Federal law enforcement agencies such as the OIG and the Justice Department regard the law as a key weapon in the anti-fraud and anti-abuse tool kit. Additionally, ACR members-both those who are hospital-based and those who are practicing in groups or clinics-face potential kickback violations in financial arrangements with other physicians, hospitals and managed care organizations.
Use of unlicensed staff, prescription or sales of unproven remedies or improper use of equipment:
The U.S. Department of Agriculture (USDA) governs a substantial percentage as well. Whether companies under FDA or USDA jurisdiction are bringing a new product to market, responding to an agency enforcement action, improving or responding to food safety and drug safety practices and needs, or attempting to challenge a new regulatory initiative, businesses regulated by FDA or USDA must know how to navigate the regulatory process. They must also clearly understand the legislative process and how new legislation can impact their businesses.
Individuals and companies under FDA, USDA, and DEA jurisdiction are subject to stringent public health statutes, and violation of these statutes carries the risk of civil and criminal liability.
An increase of federal FDA investigators has led to an elevated level of inspections across the United States and abroad. Consequently, there has been an array of new violations as well as repeat violations. Repeat violations result in the formation of industry trends and can be quite alarming when you consider that different areas of the country and world are making the same mistakes.
A successful prosecution of a health care provider that ends in a conviction can have serious consequences. The health care provider faces incarceration, fines, and possibly losing the right to practice in the medical industry.
At Kuniansky & Associates we have the skills necessary to effectively defend individuals and corporations charged with a range of serious federal and state crimes. We are committed to providing personal attention to every client and have a deep understanding of prosecutorial strategies, conducting thorough investigations and preparation in every case. We have more than 30 years of valuable trial experience to bring to your defense.
If you believe you may be under federal or state investigation for a crime, it is critical to your case that you hire a qualified criminal defense attorney right away. Visit our
Health Care Fraud website for more information, or call (713) 622-8333 today for a free consultation.
