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Dr. Nick Oberheiden
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Former State &
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Former U.S. Attorney

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Former Assistant
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What Providers Need to Know about the Federal Government’s Health Care Crackdown in 2018

Categories: Health Care Fraud

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Decisive Federal Health Care Fraud Defense Attorneys

In 2017, the federal government made clear that its vigorous efforts to combat the health care fraud will not be slowing down any time soon. Last year we saw the largest ever takedown involving alleged health care fraud, and the White House and U.S. Department of Justice (DOJ) announced their clear intention to heavily prosecute both fraud artists and legitimate health care providers suspected of fraud, waste, and abuse.

For health care providers in America, this presents a very real concern. The penalties for health care fraud are severe, and authorities such as the DOJ are increasingly relying on data analytics and other computerized methods to identify targets for federal investigations. So, as a practitioner, administrator, or health care company executive, what do you need to do to prepare for 2018?

The Federal Health Care Crackdown: Preparing for 2018

1. Large-Scale Frauds Will Continue to Be Top Federal Priorities

On July 13, 2017, the DOJ announced that it was pursuing charges against 412 individuals, including 115 doctors and other licensed professionals, as part of the nation’s largest-ever health care fraud takedown. The sting operation made national headlines, and the alleged fraud cost the government a reported $1.3 billion.

The takedown was a coordinated effort involving the DOJ’s Health Care Fraud Unit, the Drug Enforcement Administration (DEA), the Department of Health and Human Services’ (DHHS) Office of Inspector General (OIG), the Federal Bureau of Investigation (FBI), the federal Medicare Fraud Strike Force, U.S. Attorneys’ Offices, and state Medicaid Fraud Control Units (MFCUs) around the country. The locations most-heavily targeted in the takedown included:

  • Central California
  • Central Florida
  • Eastern Michigan
  • Eastern New York
  • Northern Illinois
  • Southern Louisiana
  • Southern Texas

With the results of this and other major takedowns in 2017, health care providers can expect federal authorities to continue to aggressively pursue large-scale health care fraud schemes in 2018. While providers in health care fraud “hot spots” such as those listed above are almost certain to be at risk for a federal investigation, providers in other locations around the country will need to be on high alert as well. All providers should immediately implement comprehensive compliance programs – and prepare proactive defensive strategies as well.

2. Opioid Fraud and Abuse Are Central Focuses of the Government’s Crackdown

In 2017, the DOJ also announced that it was organizing a new Opioid Fraud and Abuse Detection Unit that would be tasked specifically with targeting providers that administer and prescribe opioid medications. As part of its efforts to crackdown on opioid fraud and abuse, the DOJ also appointed federal prosecutors to, “focus solely on investigating and prosecuting health care fraud related to prescription opioids, including pill mill schemes and pharmacies that unlawfully divert or dispense prescription opioids,” in 12 designated regions around the country. These regions are:

  • Central Florida
  • Central North Carolina
  • Eastern California
  • Eastern Kentucky
  • Eastern Michigan
  • Eastern Tennessee
  • Maryland
  • Nevada
  • Northern Alabama
  • Southern Ohio
  • Southern West Virginia
  • Western Pennsylvania

For physicians, clinics, pharmacies, hospices, and other providers that deal with opioid and narcotic medications, the government’s dedication of resources to fighting opioid fraud and abuse means that investigations are likely to become far more frequent during 2018. In order to minimize the burdens of these investigations, providers should be prepared to affirmatively demonstrate that their prescription and billing practices comply with federal law.

3. Medical Marijuana Will Be a Battleground

During the first week of 2018, Attorney General Jeff Sessions announced that he was rescinding guidance instituted during the Obama administration which instructed federal prosecutors not to prioritize cases against individuals and businesses that used and dispensed marijuana in compliance with state law. This guidance paved the way for more than half of all states to legalize medical marijuana, and providers around the country have relied on this guidance to offer legal cannabis to their patients.

Now, the future of medical marijuana in the United States is uncertain. Advocates have strongly decried the reversal of federal policy, while some have suggested that the decision is more likely to lead to the federal legalization of medical marijuana. However, regardless of what the future may hold, for now, the only thing that is clear is that health care providers that prescribe medical marijuana may need to reconsider the risk of federal prosecution.

4. Providers of All Sizes Will Face Audits and Investigations

While major takedowns dominate the headlines, the vast majority of Medicare audits and health care fraud investigations target smaller providers. With the DOJ’s and other agencies’ broad mandates to combat waste and abuse targeting Medicare, Medicaid, Tricare, and other government benefit programs, any suspected instance of fraud will have the potential to garner federal law enforcement authorities’ attention in 2018.

Oftentimes, audits and investigations targeting smaller providers are the result of honest mistakes and administrative errors. With most providers relying heavily on their program eligibility, any billing or prescription practices that put their eligibility at stake will not be worth the risk involved. Yet, auditors and investigators will still vigorously pursue charges, and it will be up to smaller providers to show that they are not guilty of federal health care fraud.

5. Prosecutors Will Seek Heavy Penalties in Civil and Criminal Prosecutions

When investigations lead to charges, health care providers must match their defense strategies to the potential penalties that are on the table. In criminal health care fraud cases, providers can face enormous financial liability, program exclusion, and even federal incarceration. While being prosecuted civilly means that prison time is not a concern, being found civilly liable for health care fraud can still have long-term (and potentially practice-threatening) consequences.

As a result of the government’s health care crackdown, providers facing charges in 2018 can expect to face substantial penalties when targeted in civil and criminal health care fraud prosecutions. Avoiding punishment will require early intervention in the government’s investigation and a strategic defense tailored to the specific facts and allegations at hand.

Contact the Experienced Health Care Fraud Defense Lawyers at Oberheiden, P.C.

If you are concerned about your business’s compliance program, or if you are being targeted in a health care audit or investigation, our attorneys can help protect you. As former federal prosecutors and experienced health care fraud defense lawyers, we have a long track record of helping our clients address federal charges. To get started with a free case assessment, please call (888) 519-4897 or contact us online today.

Not all attorneys of Oberheiden, P.C. are licensed in California and nothing contained in here is meant to constitute the unauthorized practice of law.
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