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What DOL Providers Need to Know About Health Care Fraud, Bribery, and Kickbacks

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The US Postal Inspection Service, the IRS, the Office of Inspector General, and the FBI have drastically increased the numbers of criminal prosecutions of DOL and workers comp providers. This brief summary outlines how physicians, clinic owners and outpatient rehabilitation centers can effectively protect themselves against government scrutiny.

Oberheiden, P.C. is a national DOL defense law firm that offers DOL providers and federal workers compensation clinics decades of Justice Department and federal defense experience. Our attorneys have advised our DOL clients throughout the country of how to avoid illegal marketing practices, kickbacks, and billing errors. The following is a brief summary of reoccurring themes in federal criminal investigations against DOL clinics and doctors.

Common Legal Issues in DOL Investigations

1. Overbilling

True for all of health care, billing modifiers can make a significant reimbursement difference. Modifiers can easily quadruple standard code payments and are therefore prone to extra scrutiny. The correct usage of modifiers (e.g. Modifier 59) is subject to frequent audits and investigations in DOL cases and has led to indictments of toxicology owners, physicians, chiropractors, and physical therapists exposed to federal upcoding billing fraud charges.

2. Marketing DOL Patients

Contrary to modern trends and assumptions, direct marketing of injured federal employees is illegal. Patient vouchers, gifts, and other incentives for a DOL patient to attend, continue to attend a program administered by the DOL is illegal.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Attorney-at-Law & Founder

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Lynette S. Byrd
Lynette S. Byrd

Former Federal Prosecutor

Partner

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Subodh Chandra
Subodh Chandra

Former Federal Prosecutor

Local Counsel

Elizabeth K. Stepp
Elizabeth K. Stepp

Partner

Roger Bach
Roger Bach
(Non-Lawyer)

Former Special Agent, OIG

Dennis A. Wichern
Dennis A. Wichern
(Non-Lawyer)

Former Special Agent-in-Charge

Chris Quick
Chris Quick
(Non-Lawyer)

Former Special Agent, FBI

Kevin M. Sheridan
Kevin M. Sheridan
(Non-Lawyer)

Retired Supervisory Special Agent, FBI

Ray Yuen
Ray Yuen
(Non-Lawyer)

Former Supervisory Special Agent, FBI

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz
(Non-Lawyer)

Former Supervisory Special Agent, FBI

3. Lack of Supervision

Most providers (and most lawyers) do not realize at first that the rules and regulations governing the treatment of Medicare do not apply to the treatment of federal workers comp patients. That distinction becomes highly relevant when it comes to performing treatment under the appropriate supervision. Defining that supervision is subject to a maze of federal regulations and further specified by state laws respectively. A recent indictment exemplifies the frequent misunderstanding. There, a chiropractor and unlicensed aides performed physical therapy for Department of Labor beneficiaries without the necessary and present supervision of a medical doctor. All individuals were convicted of health care fraud.

4. Kickbacks

Several recent indictments in Texas, Ohio, and California specifically have charged DOL providers and clinic owners for violations of the federal Anti-Kickback Statute. The AKS makes any attempt to pay or receive anything of value if at least one purpose of that remuneration was to incentivize, induce, or increase referrals between the parties to that transaction. Kickbacks don’t need to be explicit and they do not need to be direct. For example, in one recent indictment, the operators of a hospital were charged for using third party entities to channel disguised kickbacks in form of marketing fees to the intended DOL patient referral source.

5. Bribery of Case Workers

Federal employees, such as case and claims managers, stand under particular protection when it comes to bribery. Federal law punishes the attempted or actual offering of anything in value made to an employee of the federal government if the offer is made to the person in his or her capacity as a federal employee and with the intent to obtain a favor. A recent indictment charged several workers comp marketers and claims experts with federal bribery in that these individuals entertained illegal business relationships to facilitate and expedite the processing of and the approval process of claims of injured federal workers.

6. Bribery of Union Members

To what extent business relationships can be entertained between DOL clinic owners and union members is often controversial. Do tickets to basketball games constitute bribery? Are sponsorships of Union events illegal? Is it lawful to “market” members of federal unions? There are no defined lines, but there are plenty of court cases that demonstrate what could happen if you cross the line. In general, close or monetary or reciprocal relationships to and with union members are dangerous, sanctionable, and indictable.

7. Performing Medically Unnecessary Services

More so than in the past does the federal government nowadays scrutinizes the decisions of medical providers. In an effort to identify fraud, investigators and prosecutors have begun to second-guess repeat surgeries, lengthy therapy cycles, certain mental health services, the need for expensive compound medicines or toxicology testing, and the issuance of controlled opioids. Findings of an absence of necessity has led to several recent indictments. In one case, the U.S. Attorney’s Office charged pain management specialists and pharmacy owners with health care fraud for filling unnecessary compounds for DOL beneficiaries. Surgeons in another case were indicted for issuing non-needed opioids to federal employees in violation of the Controlled Substances Act. Several outpatient rehabilitation centers have been targeted for billing therapy and work hardening when not needed.

8. Selling DOL Patient Leads

Federal law prohibits the buying or selling of so-called qualified patient leads. The more specific the information you obtain about a patient (e.g. name, address, age, insurance information, prior health record etc.), the more likely it is that such purchase would constitute a felony violation of federal health care laws.

Penalties for DOL Fraud

It is no secret that, once you have become a target of a federal workers compensation investigation, you fight for your life and your freedom. Those that have failed to be careful and attentive and lost their fraud case in federal court have often suffered sentences of years of incarceration in addition to criminal fines, restitution, and asset forfeiture.

  • Health Care Fraud (18 U.S.C. 1347)
  • Conspiracy to Make False Statements Relating to Health Care Matters (18 U.S.C. 1035; 18 U.S.C. 371)
  • Conspiracy to Commit Health Care Fraud (18 U.S.C. 1347; 18 U.S.C. 371)
  • Conspiracy to Commit Theft or Embezzlement in Connection with Health Care (18 U.S.C. 669; 18 U.S.C. 371)
  • Attempt or Conspiracy to Commit Health Care Fraud (18 U.S.C. 1347; 18 U.S.C. 371)
  • Conspiracy to Commit Medicare Fraud (18 U.S.C. 1347; 18 U.S.C. 371)
  • Conspiracy to Accept or Receive Illegal Kickbacks (42 U.S.C. 1320a-7(b)(b); 18 U.S.C. 371)
  • Conspiracy to Commit Medicaid Fraud (18 U.S.C. 1347; 18 U.S.C. 371)
  • Conspiracy to Unlawfully Use Health Information (42 U.S.C. 1320d-6; 18 U.S.C. 371)

Most federal DOL investigations arise under 18 U.S.C. 1347. This federal criminal statute makes it a felony to attempt or actually pursue a scheme of health care fraud, which includes billing fraud. Notably, the statute does not require specific intent. What that means is that prosecutors are not required to prove that the commission of a crime was the sole and ultimate purpose; sufficient is that the government can show, either by way of witnesses or simply by circumstantial evidence, that you knowingly participate in a pattern to defraud a federal health care program. If successful, the government can ask the court to apply the statute and request up to 10 years imprisonment for each and every deviation from the statute.

How Oberheiden, P.C. Can Protect Your Practice

Regardless whether you are already under investigation or just have general questions and concerns, Oberheiden, P.C. offers its DOL and health care fraud defense experience available in a free and confidential consultation.

Many of our attorneys have the unique insight of those former Justice Department prosecutors that used to lead workers compensation investigations— and charging decisions. As prosecutors and defense attorneys, Oberheiden, P.C. lawyers have been involved in some of the country’s largest and most complex DOL cases, an experience that most other firms can simply not provide.

Additionally, our attorneys have conducted a plethora of internal investigations and set up corporate compliance programs tailored to DOL clinics introducing the experience gained in countless federal criminal investigations. Knowing what to expect on the back end of failed compliance operations, billing negligence, and improper referral relationships, we can fix problems on the front end before they attract government scrutiny.

Contact Our Experienced DOL Attorneys Today.

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