Healthcare Fraud Defense

The federal Anti-Kickback Statute is a criminal statute that prohibits persons or entities from knowingly and willfully soliciting, receiving, offering, or paying remuneration for referrals for goods or services payable to a government healthcare program, such as Medicare, Medicaid, and Tricare. This statute is designed to prevent fraud and abuse. The Anti-Kickback Statute includes referral fees, finder’s fees, bonuses, discounted leases, research grants, excessive compensation, and travel or entertainment.

Billing of government and private insurance programs utilize numerical codes that identify the specific procedure or service being performed. For every necessary procedure, government healthcare programs assign a dollar amount it will pay. Up-coding occurs when a healthcare provider submits claims for healthcare services that represent a more serious and/or more expensive procedure than what was actually performed. Up-coding is a form of healthcare fraud and may be a violation of the False Claims Act.

Billing for services not rendered is a form of health care fraud that consists of submitting claims for healthcare services that were never rendered.

Ghost patients are patients who either do not exist or who never received the service or item billed for in the claim. Submitting claims for healthcare services of ghost patients are a form of health care fraud.

Medicare reimburses hospitals and healthcare institutions for certain costs for the treatment of particular patients. These hospitals and healthcare institutions are required to file Cost Reports with Medicare. One common type of health care fraud has been for hospitals or healthcare institutions to inflate the costs on their Medicare Cost Reports, or to otherwise falsify information on these cost reports to maximize Medicare reimbursement. Cost report fraud scenarios may include falsely inflating costs related to patient care; seeking reimbursement for costs that are not related to patient care; seeking reimbursement for costs for non-Medicare patients; and improperly manipulating statistics.

In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which added “Part D” to the Medicare Program. The Part D program consists of prescription drug coverage and prescription drug insurance premiums. Since its enactment, it is expected that the Part D program will be the target of substantial fraud in the coming years. Forms of Medicare Part D Fraud include claims of duplicate billing; overcharging; enrollment fraud; red-lining; and improper rebates from pharmaceutical manufacturers and wholesalers.

In order to qualify for payment by government healthcare programs, healthcare services must be medically necessary. Providers are required by law to document the medical necessity of the treatment or services for which they are seeking reimbursement. Submitting claims for services, treatments, diagnostic tests, and medical devices that are not medically necessary is a common type of health care fraud.

Federal and state laws and regulations prevent physicians and other healthcare providers from having a direct or indirect financial interest in certain services provided to their patients. An example of this is the federal Stark Law, 42 U.S.C. § 1395nn and § 1396b. The Stark Law prohibits a physician from making a referral for certain designated health services to an entity in which the physician has an ownership or investment interest or with which he or she has a compensation arrangement. In addition, the Stark law covers investments and compensation paid to any member of the physician’s immediate family. Violations of the Stark Law or another federal can also result in a violation of the False Claims Act.

A common type of healthcare fraud has been to “unbundle” procedures or tests and bill each one separately, which pursuant to Medicare and Medicaid guidelines are to be billed together. Medicare and Medicaid often will have lower reimbursement rates for groups of procedures commonly performed together. And, unbundling billing codes illegally increases a provider’s profits, resulting in greater reimbursement from Medicare and Medicaid.

Physicians, hospitals and other providers are required to provide certain certifications when submitting bills to government healthcare programs, such as Medicare, Medicaid, and Tricare. These certifications include medical necessity, actual performance, and regulatory compliance. In addition, healthcare providers that provide goods or services to government healthcare programs must satisfy all contractual obligations with the government. Falsifying such certifications in order to get a health care claim paid or to obtain additional business is a form of healthcare fraud and may also be a violation of the False Claims Act.

The goal we have when representing clients accused of healthcare fraud is to avoid criminal investigations. Oftentimes, an experienced healthcare fraud defense attorney, such as one of our former federal prosecutors, is able to channel a healthcare fraud case onto a civil path so that a provider’s license and freedom remain untouched and intact.

If you are wondering how to avoid charges in healthcare fraud investigations, my first recommendation is stop waiting. Stop confusing yourself about awful indictments and lengthy prison sentences. Call me.

I’m attorney Nick Oberheiden. Federal cases require experience, not experiments. My recipe for avoiding charges in hundreds of healthcare fraud investigations involving the FBI, the Justice Department, and federal prosecutors across the entire United States is simple: timing. Prosecutors know me for my determined, proactive approach. I don’t wait. I don’t hesitate. I get in front of it. I explain, clarify, and resolve.

Here are some recent federal examples:

My client’s business was under federal investigation. His previous lawyer didn’t do anything for months. Agents interviewed business affiliates, charges were imminent. I immediately changed course, met with the FBI and the prosecutor, and introduced information the government was not aware of. My client was not charged.

Here is another one: the FBI executed a search warrant against my client’s business. I avoided charges.

Another client received a target letter. I avoided charges.

A business client was served a grand jury subpoena; again, I avoided charges.

These are all federal cases. These are all real examples. All you need to do today is call me. I am here to help you right away.

There are three types of defense attorneys that can assist providers with health care fraud investigations in varying circumstances. These are:

• Civil Defense Attorneys – Civil defense attorneys represent health care providers in fraud matters involving insurance companies, benefit managers, and other private parties.
• State Defense Attorneys – State defense attorneys represent health care providers in matters involving state agencies such as state attorney general’s offices and Medicaid Fraud Control Units (MFCUs).
• Federal Defense Attorneys – Federal defense attorneys represent health care providers in matters involving Medicare, Tricare, and the DOL and VA health care benefit programs. This includes investigations as well as civil and criminal law enforcement cases.

There are numerous state and federal agencies that investigate providers suspected of health care fraud. This includes:

• U.S. Department of Health and Human Services Office of Inspector General (HHS OIG)
• Centers for Medicare and Medicaid Services (CMS)
• U.S. Department of Defense (DOD) and Veterans Affairs (Tricare and VA fraud)
• U.S. Department of Labor (DOL)
• U.S. Department of Justice (DOJ)
• Medicaid Fraud Control Units (MFCUs)
• Federal Bureau of Investigation (FBI)
• Internal Revenue Service Criminal Investigations (IRS CI)

In addition to these government agencies, contractors working with CMS audit health care providers as well. These include Medicare administrative contractors (MACs), recovery audit contractors (RACs), and uniform program integrity contractors (UPICs). Private insurance companies and benefit managers also conduct health care fraud investigations targeting participating providers. These audits and investigations can lead to recoupment demands, loss of eligibility, and other penalties.

The elements of health care fraud vary depending on several factors—including most importantly whether a case is civil or criminal in nature. In federal criminal cases, the elements of health care fraud under 18 U.S.C. Section 1347 are: (1) Knowingly and willfully (2) executing, or attempting to execute, a scheme or artifice (3) to defraud a health care benefit program or obtain funds from a health care benefit program under false pretenses (4) in connection with the delivery of, or payment for, health care benefits, items, or services.

In addition to pursuing criminal charges under 18 U.S.C. Section 1347, federal prosecutors can also pursue civil or criminal charges under the Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act, False Claims Act, and various other federal laws. The Stark Law is another federal health care fraud statute that imposes civil penalties for engaging in prohibited patient referrals for “designated health services.”

Health care fraud and abuse can take many different forms, and state and federal authorities target providers for a broad range of offenses. The major types of health care fraud and abuse include:

• Engaging in prohibited referrals for “designated health services”
• Falsifying test results and other patient records
• Offering, paying, soliciting, or accepting prohibited “remuneration” for patient referrals
• Overbilling Medicare, Medicaid, Tricare, the DOL, or the VA
• Overbilling a private health care insurance company
• Upcoding, unbundling, double-billing, “phantom” billing, and other billing and coding violations