Health Care Fraud Defense Lawyer

10 Types of Health Care Fraud

When you have a heart attack, you don’t call a dentist. You go to a cardiologist, to an expert in the field. Similarly, if you are accused of health care fraud, you don’t visit with a DUI attorney, and the best assault criminal defense lawyer may know little about health care laws and their complex exceptions. Instead, you call a health care fraud defense lawyer. You want someone that (i) is profoundly familiar with all health care rules and regulations; (ii) does not need introductions or legal research to understand your business or industry; (iii) has superb and proven negotiation and trial skills; (iv) has a proven track record of successfully defending health care fraud allegations. This is how you know that you are in good hands and this is why our clients trust us.

So, what constitutes “health care fraud”? Here are ten of the most common examples that can lead to civil or criminal charges:

1. Billing and Coding Errors

Billing and coding errors – both intentional and unintentional – are among the most common issues that trigger federal health care fraud investigations. Providers that participate in Medicare, Medicaid, Tricare, and other government health care benefit programs are subject to an extraordinarily complex regulatory scheme that includes numerous specific requirements for obtaining reimbursements for services, supplies, medications, and durable medical equipment (DME). These regulatory schemes and their requirements are also constantly changing and maintaining compliance with the applicable billing requirements is a task that requires deep health care law knowledge and constant dedication to maintaining compliance.

Unfortunately, oftentimes, even these efforts are not enough. Billing and coding errors are common; and, when they trigger the federal health care authorities’ monitoring systems, they can lead to costly investigations. While evidence of knowledge or intent is required to establish criminal culpability for most forms of fraud, even simple administrative errors and honest mistakes can lead to federal civil cases with fines of more than $21,000 (as of 2017) per “false claim” plus recoupments, other financial penalties, and loss of eligibility. This includes errors and mistakes such as:

Double-billing a health care benefit program or billing the government and a private insurer for the same service, supply, medication, or piece of equipment.
Billing for operational expenses and other “non-allowable” costs which are not eligible for federal program reimbursement.
Billing for services at stand-alone rates rather than the reduced “bundled” rate for related health care services (commonly known as “unbundling”).
Billing for services at a higher rate than the one prescribed by the applicable program reimbursement regulations (commonly known as “up-coding”).
Billing for costs or services that are otherwise ineligible for reimbursement, including services provided by unlicensed or excluded providers and services that are medically-unnecessary.

2. Kickbacks, Bribes and Rebates

Under the federal Anti-Kickback Statute, it is illegal for any health care provider to, “knowingly and willfully offer or pay any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce,” a purchase, lease, or patient referral – where any part of the payment is to be made using funds from a federal health care benefit program. Federal law makes it a punishable offense to receive any such kickback, bribe, or rebate as well.

While the Anti-Kickback Statute uses the language, “knowingly and willfully,” under the Patient Protection and Affordable Care Act (PPACA) and federal case law, it has been established that actual knowledge of the illegal payment is not required. As a result, even providers who did not understand that a payment they made or received constituted an illegal kickback or rebate can still face federal prosecution. Forms of “remuneration” covered under the statute may include:

Cash payments
Discounts for services, supplies, or equipment
Free or below fair market value use of clinical space, equipment or staff
Payments to family members
In-kind gifts (such as airplane tickets)
Certain marketing commissions

While the Anti-Kickback Statute is broad in its scope, its prohibitions are not absolute. For example, providers can compensate W-2 employees (subject to certain limits and in accordance with enumerated factors) where the payments would constitute illegal kickbacks if paid to an independent party or contractor. Certain risk-sharing and purchasing arrangements are exempt from the Anti-Kickback Statute as well, and the law also includes safe harbors for a number of specific types of transactions.

3. Physician Self-Referrals

While the Anti-Kickback Statute applies broadly to providers in all segments of the health industry that participate in federal health care benefit programs, the Stark Law imposes additional restrictions that are unique to practicing physicians. The Stark Law prohibits any transaction that qualifies as a so-called “physician self-referral,” which is defined as a referral for “designated health services” to be provided by an entity with which the referring physician has a “financial relationship.”

The definitions of “designated health services” and “financial relationship” are both extremely broad, and this makes the Stark Law a potent weapon for authorities seeking to crack down on improper billings to Medicare and other benefit programs. Designated health services include:

Clinical laboratory services
DME and medical supplies
Home health services
Imaging
Inpatient and outpatient hospital services
Outpatient pathology
Outpatient prescriptions
Parenteral and enteral nutrients, equipment, and supplies
Physical therapy
Prosthetics, orthotics, and related supplies
Radiology and radiological therapy

Financial relationships that can trigger Stark Law implications include:

Direct compensation arrangements
Direct investment
Indirect investment or compensation arrangements
Company or practice ownership

Like the Anti-Kickback Statute, the Stark Law includes a limited number of exceptions that apply in certain specific circumstances. Proving that you qualify for an exception will often be a key defense strategy in Stark Law investigations, and having adequate documentation of a qualifying financial relationship is often among the best ways to avoid liability.

4. False and Fraudulent Claims

The False Claims Act is perhaps the single most-powerful tool that the federal government has for prosecuting providers suspected of fraud. The False Claims Act is an extraordinarily broad statute that imposes civil and criminal penalties for any and all “false and fraudulent” claims submitted for federal health care program reimbursement.

What constitutes a false or fraudulent claim? Since the False Claims Act (FCA) applies across the board, coding errors, illegal forms of remuneration, and other health care law violations can all lead to FCA liability. However, a key limitation of the FCA is that it imposes penalties only where a provider “knowingly” submits a false or fraudulent claim, or where a provider “acts in reckless disregard” of the truth in order to remain willfully ignorant of a billing violation. The government has a number of methods that it uses to prove this actual or “constructive” knowledge, but note that our health care fraud defense lawyers can implement various defenses to FCA liability.

There are two ways that health care providers can become targets of False Claims Act investigations. The first is by direct government initiative, usually when Medicare, Medicaid, or Tricare billing data trends suggest an “abnormal” billing record that is indicative of possible false or fraudulent claims. The second is through what is known as a qui tam lawsuit (or “whistleblower” claim), where a private citizen with information about an alleged violation submits a case to the U.S. Department of Justice (DOJ) or the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG).

For more information about defending against False Claims Act investigations, we encourage you to read:

5. Billing for Medically-Unnecessary Services, Supplies, or Equipment

In order for medical services, prescription medications, or health care supplies or equipment to be eligible for federal program reimbursement, they must qualify as “medically necessary.” For purposes of Medicare billing compliance, services and supplies are considered medically necessary when they are, “needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”

Once again, the definition of proscribed practices in the context of the medical-necessity requirement is broader than it may initially seem. For example, the following services will all generally be considered “medically unnecessary” and therefore not eligible for federal benefit program reimbursement:

Inpatient treatment that lasts beyond the Medicare-approved length of stay
Physical therapy treatments in excess of the Medicare usage limit for such services
Provision of medical services in a hospital where use of a lower-cost facility was an option
Prescription of medications to treat certain conditions where the entire course of treatment is considered medically-unnecessary (such as cosmetic procedures)

Here, too, exceptions apply. In particular, a variety of screenings as well as annual “wellness” visits are generally eligible for reimbursement even if they do not result in a diagnosis requiring treatment. If your business is being targeted in a federal investigation for allegedly billing for medically-unnecessary services or supplies, our health care fraud defense attorneys can assess your internal policies, procedures, and your reimbursement billing record to determine what defenses you have available.

6. Billing for Services, Supplies, or Equipment Not Provided

The DOJ, OIG, Centers for Medicare and Medicaid Services (CMS), Department of Defense (DOD), Medicare Fraud Strike Force, and other federal authorities also vigorously pursue cases against providers suspected of billing for services, supplies, and equipment not actually provided to patients. This practice is commonly known as “phantom billing” in the context of intentional Medicare and Tricare fraud schemes. However, billing for services and items not provided can also be the result of coding errors (i.e. submitting the incorrect billing code), administrative staff misreading patient records, making typographical mistakes, and a variety of other non-criminal practices that do not warrant federal enforcement action.

If your business or practice is being investigated for submitting false or fraudulent reimbursement requests for services not rendered or supplies not provided, it will be critical to get to the bottom of the issue as soon as possible. It is ideal to get to the root of the problem before the government’s investigators find any information that they believe serves as evidence of health care fraud. If it turns out that someone within your business or practice made a mistake, our lawyers can help you address the issue proactively and present a tailored defense that is focused on insulating you, your company, and your key employees from civil or criminal responsibility.

7. Prescription Drug Fraud

Prescription drug fraud has long been a top priority within the government’s health care fraud enforcement efforts. With renewed focus on the nation’s opioid epidemic, the DOJ is devoting additional technological and human resources to targeting physicians, pharmacists, and other health care providers suspected of improperly prescribing, dispensing, and administering opioid medications. In 2017, Attorney General Jeff Sessions announced the formation of a new Opioid Fraud and Abuse Detection Unit, which is, “focus[ed] specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to th[e] opioid epidemic.”

Like health care fraud, “prescription drug fraud” is a broad term that encompasses a wide range of civil and criminal offenses under numerous federal laws. Prescription drug fraud investigations conducted by the DOJ, the Drug Enforcement Administration’s (DEA), and other agencies, frequently target practices such as:

Dispensing more medication than was prescribed
Drug shorting and refill schemes
Falsifying prescriptions
Illegally importing prescription medications
Inaccurately reporting test results in order to prescribe drugs that are medically-unnecessary
Prescribing medications without an in-person exam
Prescription drug diversion
Selling fraudulent prescriptions

Compound pharmacies have also recently received renewed attention from federal law enforcement authorities. From allegations involving kickbacks and overbilling for compound medications to falsely marketing compound drugs as FDA-approved, compound pharmacy fraud is a broad and highly targeted area under the umbrella of health care fraud as well.

8. Falsifying Patient Records and Inaccurately Reporting Test Results

Despite the omnipresent need for quality health care in the United States, some physicians’ practices, clinical laboratories, and other health care businesses are in financial trouble. Whether due to market competition or other factors, some practitioners and businesses simply are not able to make payroll and pay their expenses on an ongoing basis. Unfortunately, this leads some practice owners and executives to make poor decisions, including falsifying patient records and test results in order to bill for additional testing and procedures.

However, in certain circumstances, legitimate patient records and test results can appear falsified or fraudulent when compared to regional or national averages. This, like many other billing-related “issues,” can often trigger investigations as a result of the government’s heavy reliance on data analytics. Federal authorities simply do not have the time to individually examine all health care providers’ billing practices. As a result, they are increasingly relying on data analysis to identify providers who, based on certain characteristics of their benefit program billings, present certain red flags for health care fraud.

Regardless of the circumstances at hand, you need to get out in front of the government’s investigation. This means hiring experienced legal representation promptly, and it may also mean self-disclosing any violations under the protective provisions of the False Claims Act. But, these provisions apply only under limited circumstances; and, before you provide any information to federal authorities, it is imperative that you discuss your situation with a knowledgeable health care fraud defense lawyer.

9. Fraudulent Physician Certifications

In order for a Medicare or other health care program beneficiary to be covered for home health or hospice care, a physician must certify as to his or her eligibility. This certification must be based upon the physician’s own independent examination, and must accurately reflect the results of the examination without financial motive or influence from other outside factors. Allegations of fraudulent certifications are common in health care fraud investigations targeting home health providers and hospices, and physicians will often face allegations of engaging in fraudulent certification practices as well. Here are some common allegations in these types of cases.

Home providers and hospices creating false, fraudulent, or forged physician certifications
Physicians accepting bribes or kickbacks in exchange for fraudulent certifications
Relying on a physician other than the patient’s primary care physician to provide a home health or hospice certification

Fraud allegations involving patient recertification are common as well. Home health patients must be recertified every 60 days, and recertification requires that a reviewing physician determine, based upon his or her professional judgment, that home health care is still needed. The standards for recertification are the same as those for initial certification. If a physician fraudulently re-certifies a patient, or if a home health agency falsifies or forges a recertification, there is the possibility for civil and criminal penalties to both be on the table.

Protect your medical license with the attorneys at Oberheiden, P.C.!

10. Issues with Election Statements for Hospice Care

In addition to the requirement for a physician certification, in order for a patient to have his or her hospice care expenses covered by Medicare, the patient must sign an election statement. The election statement must include two specific acknowledgments. In the election statement, the patient must acknowledge that:

he or she has received complete and accurate information about the palliative (rather than curative) nature of hospice care, and
by entering hospice care, the patient is waiving his or her right to Medicare coverage for treatment not provided or arranged for by the patient’s chosen hospice services provider.

In order to avoid prosecution in the event of a federal investigation, hospices should keep all patient election statements, and they must also respect patients’ decisions to revoke their elections. If a hospice is unable to provide valid election statements for all patients within its care (and for which Medicare has been billed in the past), it will very likely face intense scrutiny from federal authorities.

Oberheiden, P.C. – Health Care Fraud Defense

Oberheiden, P.C. is one of the country’s best-known health care fraud defense firms. Our health care fraud defense attorneys — many of which come from leading positions within the Department of Justice — have successfully defended physicians, businesses, and business owners in civil and criminal health care fraud investigations across the United States, involving Anti-Kickback, Medicare fraud, Medicaid fraud, Tricare fraud, fraud in connection with the Department of Labor benefit program, Stark Law, and False Claims Act allegations.

Our track record is impeccable. What makes Oberheiden, P.C. so successful is our combination of government experience and relentless negotiation and trial advocacy. Several of our lawyers previously served in leading health care law positions at the Department of Justice. We are proud of our results and we are ready to do the same for you.

Anti-Kickback Investigation against a nationally operating health care business. Several branches of the federal government investigated alleged violations of the anti-kickback statute within a large health care business. Our attorneys pursued a proactive approach with the Lead Assistant United States Attorney (AUSA) with the goal to present factual explanations and legal arguments as to why our client was not involved in fraud and abuse. Parallel to providing documents and corporate policies to the government, we met with the prosecutors and our health care law knowledge allowed us to persuade the government to conclude the fraud investigation with no civil and no criminal liability for our client and any of its principals, directors, employees, and otherwise affiliated individuals.

Medicare Fraud & Stark Law investigation by the Department of Justice and the Federal Bureau of Investigation (FBI) against our client. After initiating and continuing negotiations, our attorneys were able to provide the government with compelling reasons to end the investigation at an early stage. The case had both civil and criminal components and our attorneys were able to resolve the matter with no civil and no criminal liability for our client and any of its principals, directors, employees, and otherwise affiliated individuals.

Tricare Fraud investigation by the department of defense, the Federal Bureau of Investigation (FBI), and the Department of Justice. Our health care client received a grand jury subpoena potentially implicating him in a federal health care fraud conspiracy. Our attorneys were able to discuss the matter with the Lead Assistant United States Attorney (AUSA) and reached a proffer agreement with the government. Our client was facing several years of incarceration; we were able to negotiate a no civil and no criminal liability for our client.

False Claims Act investigation against a large health care conglomerate. Our client received a subpoena from the office of inspector general. Our health care fraud defense attorneys quickly determined that the investigation had underlying anti-kickback and stark law components. We immediately reached out to the handling local U.S. Attorney’s office and began negotiations to resolve the matter with the primary goal to avoid criminal prosecution. Several months into the case we felt comfortable enough to make a presentation at the Department of Justice and were able to explain and resolve the allegations by way of a skillful health care fraud defense presentation. The government ended the investigation and we concluded the representation for our client with no civil and no criminal liability for our client and any of its principals, directors, employees, and otherwise affiliated individuals.

Why Do Clients Trust Oberheiden, P.C.?

Reputations are earned, not given. At Oberheiden, P.C., we have understood this reality from the day our firm was founded. From day one we have painstakingly built the stellar reputation that we enjoy today. Here are a few of the reasons why our clients routinely place so much trust in us.

1. Experience

Our healthcare fraud defense attorneys are battle-hardened warriors with decades of federal experience behind them. We use this valuable experience to help you navigate the twists and turns of a federal investigation. Not only can we decisively intervene in a federal investigation – we can teach you how to comply with federal regulatory requirements so that you will never attract the attention of federal investigators in the first place.

2. Perspective

At Oberheiden, P.C., our “secret weapon” is the presence of several former federal prosecutors on our team, all of whom switched sides to join us after distinguished careers with the federal government. Because of their unique understanding of how the federal government approaches cases, we are better able to create an optimally effective case strategy for you.

3. Results

The optimal outcome of a federal investigation is the avoidance of penalties combined with the prompt and cost-effective resolution of your case. We are justifiably confident in our ability to achieve these goals, as we have a multitude of clients who have already concluded their cases with no civil or criminal liability, or with surprisingly favorable outcomes.

4. Team Spirit

The federal government possesses immense resources, and they will not hesitate to gang up on you with a team of investigators, federal agents, and prosecutors. We pride ourselves on our ability to effectively pool the talents of our lawyers – thereby enabling you to level the playing field by fighting back with a cohesive and unified defense team.

5. Loyalty

Client loyalty is the primary virtue of any law firm, because without it no other asset can be used effectively. You may be facing tremendous potential liability – millions of dollars in fines, business bankruptcy, and perhaps even time behind bars. At Oberheiden, P.C., you will enjoy the security of knowing that your healthcare fraud defense lawyers are as dedicated to protecting your best interests as they would be if they were being investigated themselves.

If you received a subpoena, a target letter, a request to testify or any other correspondence from the Department of Justice, you should speak to one of our experienced health care fraud defense lawyers today. Calls are free and confidential. We are here to avoid investigations or even indictments. Call one of our former federal prosecutors or request a free and confidential assessment from Dr. Nick Oberheiden.

Oberheiden, P.C. is a team of former Department of Justice prosecutors and veteran federal defense lawyers that represent professionals and businesses against government investigations and federal charges. With decades of experience in leading government positions, our attorneys are able to effectively assess a situation and to provide reliable advice in times of crisis. Call us today for a free and confidential assessment.

Additional Resources

Meet Nick

Click Here to Meet Nick Directly

Health Care Defense Resources

Testimonials

Dr. Nick Oberheiden

5.0

Based on 19 reviews

I found Dr. Nick Oberheiden online and the moment I spoke with him, I knew he is a true federal law expert. Nick outlined a defense strategy that was so thought through and so out of this world--and he executed and delivered like I would never have imagined. Nick is unbelievably good!! Nick is the very best of the best lawyers. Hire Nick if you want a classy, smart, and extremely successful lawyer.

David Lo

Nick is extremely professional and knows what he is doing. He is also very kind as a person (unless he is in court!) I would recommend him to just about anyone if they need an amazing lawyer that is top notch and would frankly be scary to face in the court room. He will always do a great job representing his clients. Thank you very much.

Anna Pham

Nick is the absolute top expert in any federal case

Jeff Crilley

Extremely successful attorney with brilliant litigation skills.

Shannon Faulk

Smart. Smarter. Nick. As a healthcare executive, I once ran into a litigation issue. I hired Nick and, literally, before I knew it the case was resolved in my favor. Nick has an incredible presence and every lawyer in the room knows that Nick will do exactly what he says. It was a mesmerizing experience to see Nick in action! Very calm and determined, Nick is the absolute top litigator.

Whitney Bryant Milam

Nick has been a friend and trusted advisor for almost 10 years. As anyone just looking at his bio can tell, Nick is an outstanding attorney in highest demand across the country. All healthcare providers should hire attorney Nick Oberheiden!! You will not be disappointed.

Pamela mulrooney

I have never witnessed a lawyer with such uncompromising client commitment, integrity, and dedication. On weekends, at night, in the morning— Nick is always there for his clients, constantly identifying solutions, no matter how complex the situation. The only question I have after all these years of knowing Nick: Does he ever sleep?

Laura Driscoll

Renaud Rodrigue

Dr. Oberheiden has served as council and represented our company on several occasions, even during depositions, contract reviews and providing invaluable advice on multiple occasions that transpired into multilevel success in our business. He and his teams knowledge of both local, state and federal statues, accompanied by their areas of expertise law regarding best asset protection, estate planning and wealth management solutions have provided both professional and personal growth for my companies, safeguarding them and protection my family’s name and legacy. I would recommend this firm and Dr. Nick Oberheiden without hesitation. I have no doubt that you will experience success with his council.

Corban Milam

I have worked with Nick Oberheiden for over ten years on various litigation matters in and around New York City. Nick is an accomplished and seasoned lawyer and litigator---efficient, reliable, practical and, at the same time, highly academic. Nick will take the time necessary to understand a client's short- and long-term goals, and tailor his representation and advice to work toward and achieve those ends. Nick is a zealous advocate for his client, and will never sacrifice his client's interests for a quick or easy resolution to a case. At the end of the day, Nick is a great person to know if you or your business is in need of a top litigator or defense attorney.

Brendan Carosi

Nick Oberheiden was the 3rd representation for my sister case. She accused of crimes that she did not commit, and later a victim of Attorney misconduct with her initial council that sabotaged her case. We went with a big firm for second council which was the biggest mistake. They did not make time for us yet burned through the retainer with all the evidence but NO motivation to do the job and fight for her. Nick was able to get more accomplished in 24 hours of taking over then any other attorney. I can not express how grateful I am that he flew down a few days later and spend hours and hours with my sister. Regardless of the outcome at least we can rest comfortably that we had someone who went above and beyond and explored all options. I HIGHLY HIGHLY recommend Nick if you are in a tough spot and need help.

Mohsin qazi

When I was faced with one of the most terrifying and unexpected situations in my life, I called Dr. Oberheiden. I had vetted other attorneys and came right back to him. His knowledge, expertise, and reassuring presence made the decision easy. Throughout my case, his level of communication was what I needed and expected. He constantly updated me on the status and progress of my case and was able to “talk me off the ledge” when the stress of it all would set in. He is simply the best of the best...there’s not a question about it.

Angela Lee

Nick is a superb lawyer with exceptional skills and a formidable personality. Nick works harder, he thinks smarter, and he delivers faster than any lawyer you will ever find. Good, better, Nick!

Jacqueline Singleton

1st class service. Atty. Iberheiden and Atty. Lynette Byrd were always available for us during the whole process of our Home Health Audit. Thank you so much!

Ed Orosa

I am a healthcare compliance consultant with almost 25 years of experience. The one advice I have for anyone seeking a lawyer with unbeatable healthcare law experience is to hire attorney Nick Oberheiden. For the past 8 years, I have worked with Nick on a variety of healthcare matters—from DEA compliance to DOL supervisory rules to setting up PT and pain management clinics. I have never once seen a client not being 100% intrigued by Nick’s proven expertise in the field of healthcare structuring and compliance. Dr. S.T.

Raft Consultants

Nick Oberheiden is a spectacular lawyer, a true life saver. Nick is simply the very best!

Michael P

Nick Oberheiden is the absolute best federal litigation attorney. Nick gives you the immediate comfort of feeling 100% protected. He is polite, respectful— and extremely compelling. His legal strategy turned out to be brilliant.

Marshall M

Great firm, with a great firm record of experienced healthcare and litigation attorneys.

Chris Anderson

Great attorney who will fight to protect your rights. I would recommend Nick to any friend or family member.

Gerrid Smith

‹

›

Attorney Nick Oberheiden, PhD Answers Your Health Care Fraud FAQs

Q: Why is my company being targeted in a federal health care fraud investigation?
There is a saying: "There are two kinds of health care companies, those that have been investigated, and those that will be investigated." Due to widespread Medicare fraud (usually involving scam artists who intentionally target flaws in the federal Medicare system), combatting suspected instances of health care fraud has become one of the federal government’s top law enforcement priorities. Today, the HEAT Task Force (a joint effort of the DOJ and HHS) and other law enforcement agencies are using data analytics to identify potential targets for investigations, and this unfortunately is leading to a high number of investigations targeting innocent health care providers.

Q: What are some potential defenses to allegations of federal health care fraud?
One of the most common defenses in health care fraud investigations involving legitimate companies and professional practices is to demonstrate a lack of intent. Often, when billing mistakes have occurred, they are the result of organizational deficiencies, staff errors, and other issues that do not warrant the imposition of civil and criminal penalties. As we learn more about your situation, we will be able to identify all of the defenses you have available.

Q: What are some of the most common issues in health care fraud investigations?
Federal investigations frequently target alleged Medicare billing violations, though we are seeing cases that involve a wide range of other health care-related issues, as well. Our experience includes representing clients throughout the health care industry in matters involving allegations of:

Excessive rates and billing for services and equipment that are not used or not medically necessary
Fraudulent physician certifications
Illegal kickbacks
Hospice and home health fraud
Medicare, Tricare, and Department of Labor (DOL) fraud
Pharmacy and compound pharmacy fraud
Physician referrals
Upcoding, double-billing, and other billing issues

Q: How do I know if my case is civil or criminal in nature?
The Anti-Kickback Statute, the Stark Law, the False Claims Act, and other federal health care fraud laws include provisions for both civil and criminal penalties. When pursuing charges against a provider, the federal government must choose to pursue one type of case or the other. So, how do you know if your case is civil or criminal in nature?

Unfortunately, it is not always easy to tell. It is also possible for a civil investigation to become criminal if certain evidence (usually evidence of knowledge or intent) is discovered. Federal authorities often do not share this information with providers, and providers who do not hire legal counsel often do not find out the nature of their investigations under the government files charges against them.

When we are retained for an investigation, one of our first steps is to contact the federal prosecutor’s office to find out if our client is being civilly or criminally accused. We can also use a variety of other factors, such as the types of questions asked and information requested, to assess the nature of an investigation. Once we know whether an investigation is civil or criminal in nature, then we can custom-tailor a defense strategy focused on the specific facts, laws, and allegations at hand.

Q: What are the civil penalties for health care fraud?
In a civil health care fraud case, the penalties are predominantly financial. Those that are not financial have an indirect financial impact, and in many cases they can be devastating to a business or practice. These are the potential civil penalties under the False Claims Act:

Recoupment
Treble (triple) damages
Fines of over $21,000 per false claim
Fees and costs
Federal health care benefit program exclusion
Licensing action by state or local authorities

The Anti-Kickback Statute, Stark Law, and other health care fraud statutes include civil penalties of similar severity as well.

Q: What are the criminal penalties for health care fraud?
The most-significant difference between civil and criminal health care fraud cases is that the penalties in criminal cases include federal incarceration. Each statute has its own fines and maximum prison terms, and a criminal conviction can result in exclusion, licensing action, and other consequences as well. Examples of some of the criminal penalties under the primary federal health care fraud statutes include:

Anti-Kickback Statute – Five years in federal prison and a $25,000 fine per violation
False Claims Act – Five years in federal prison for each false or fraudulent claim and potentially hundreds of thousands of dollars in fines in cases involving multiple violations
Stark Law – The Stark Law does not include provisions for criminal punishment, however, Stark Law violations can trigger liability under the False Claims Act.

In addition to facing criminal penalties under these statutes, providers charged with criminal health care fraud will often be charged with other federal offenses as well. Crimes such as mail fraud and wire fraud carry fines of up to $250,000 and 20 years of federal incarceration for each individual offense, and the breadth of these statutes means that almost all cases of health care fraud will provide federal prosecutors with the opportunity to pursue these additional penalties.

Q: What is required for a valid physician certification for home health or hospice care?
Before billing Medicare for a patient’s palliative care, a home health agency or hospice must obtain a physician certification indicating that this is an appropriate course of treatment. A valid physician certification must state that (i) the patient is terminally ill, and (ii) the patient’s life expectancy is six months or less. While home health agencies and hospices cannot be penalized simply because their patients live longer than expected, treating patients for longer than six months can often lead to government scrutiny of home health providers’ and hospice facilities’ physician certification practices.

Q: What is the Medicare Fraud Strike Force and why is it looking into my health care business or medical practice?
The Medicare Fraud Strike Force is a joint effort of the OIG, DOJ, Federal Bureau of Investigation (FBI), Centers for Medicare and Medicaid Services (CMS), and other federal and local law enforcement agencies that has secured more than 2,000 indictments and $2.5 billion in financial recoveries since its formation in 2007. The Medicare Fraud Strike Force vigorously pursues cases of suspected health care fraud targeting the Medicare billing system, and it currently has teams located in nine “hot spots” around the country:

Brooklyn, New York
Chicago, Illinois
Dallas, Texas
Detroit, Michigan
Los Angeles, California
Miami, Florida
Southern Louisiana
Southern Texas
Tampa, Florida

Q: What are some examples of exemptions and safe harbors under the Anti-Kickback Statute?
As we mentioned above, while the Anti-Kickback Statute’s coverage is broad, it also provides for a limited number of exemptions and safe harbors. One such provision that we are commonly able to use to defend our clients is the “small investment safe harbor.”

Under the small investment safe harbor, a prohibited “financial relationship” does not exist if eight conditions are satisfied. You can read about each of these conditions in detail in What Is the Small Investor Safe Harbor?

Other exceptions and safe harbors exist under the Anti-Kickback Statute for certain investment interests and financial arrangements involving:

Discounts and price reductions
Electronic health records involving non-monetary goods and services
Employee compensation arrangements
Group purchasing organizations
Investments in group practices and solo practices
Investments in publicly-traded companies
Personal services and management agreements
Practitioner recruitment
Real estate and equipment leases
Referral agreements
Sale of physician-owned practices

Q: What is the “personal services” exception under the Stark Law?
The Stark Law’s personal services exception provides a defense to the statute’s strict liability provisions in circumstances where a physician has a long-term contractual relationship with the entity to which he or she provides patient referrals. In order for the exception to apply, there are six conditions that must all be satisfied:

The referring physician and the entity receiving referrals must be parties to a written and signed agreement that describes the physician’s services
The agreement must cover all services to be provided
The services must serve a legitimate purpose and not involve business promotion or any other activity that violates federal law
The agreement must have a minimum term of one year, and
The physician’s compensation must be established in advance based upon market factors, and must not be tied to the volume or value of referrals provided

Learn more: What Is the Personal Service Exception under Stark Law?

Q: When should a health care provider self-disclose a violation of the False Claims Act?
Under the False Claims Act’s self-disclosure provisions, health care providers can mitigate their financial liability for civil violations by reporting their own billing violations to the government. In order to be eligible for the protections of self-disclosure:

The provider must fully self-disclose the violation within 30 days of its discovery
The provider must fully cooperate with the government’s investigation, and
The self-disclosure must be fully voluntary, and not the result of facing a civil, criminal, or administrative investigation

Since self-disclosing will often trigger a federal investigation, providers should be extremely cautious about sharing information about their billing practices with the government. However, providers also need to be aware that failing to self-disclose can have implications under ethics rules and certain other federal statutes as well. If you have recently learned of a possible billing violation in your business or practice, your next step should be to speak with a qualified health care fraud defense attorney, as you need to make sure you avoid mistakes that could jeopardize your defense.

Q: Is a Medicare audit the same thing as a health care fraud investigation?
No. As part of CMS’s efforts to combat Medicare fraud, it has instituted a “fee for service” program under which government contractors get paid to uncover evidence of billing violations. These contractors conduct “audits” of providers’ billing records (both remotely and on-site), and they have broad authority to both request information and initiate action against providers suspected of health care fraud. Furthermore, since CMS contractors have a strong financial incentive to uncover fraudulent billings, they will often go to great lengths to find evidence that is sufficient to justify dangerous allegations.

An audit by a Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) is not a federal investigation. However, it can lead to one. ZPICs and RACs can also demand recoupments, deny future payments, and initiate pre-payment review. As a result, any provider facing a ZPIC or RAC audit must take the audit very seriously, and this starts with hiring experienced legal representation.

Q: What are the benefits of seeking legal representation during the government’s investigation?
The primary benefit of seeking legal representation during your investigation is to prevent the investigation from leading to charges. We want to resolve your case as quickly as possible, and this means terminating the investigation before fines and prison time are on the table. By seeking legal representation early, you give yourself the best chance of avoiding the need to go to trial.