The following descriptions outline the government’s various strategies in preventing and prosecuting fraud, waste, and abuse in the Medicare and Medicaid programs.
Follow-up Prosecution: Medicare and Medicaid audits are now more likely to be followed by investigation and prosecution for health care fraud. Recent legislation has given both federal and state agencies a tremendous amount of power in dealing with fraud in the health care industry. Private citizens, beneficiaries, and employees are being encouraged by the government and plaintiffs’ attorneys to pursue civil health care fraud cases against medical providers with the lure of increased monetary incentive.
Agency Coordination: Primary responsibility for enforcing federal laws regarding health care fraud rests with DOJ and U.S. attorneys. The FBI plays a major role in assisting DOJ in investigating and developing health care fraud cases. OIG is responsible for investigating fraud cases and bringing enforcement actions involving administrative sanctions. Individual states have their own MFCUs, and local prosecutors can bring such cases as well.
Private companies that contract with CMS to administer programs such as MACs and RACs have some responsibilities in reviewing claims, detecting upcoding and other improper billing practices, and recovering overpayments. In certain circumstances, private parties can pursue health care fraud through a civil lawsuit, although the government has the option of taking over the case.
Investigation and Prosecution: Investigations into Medicare and Medicaid fraud begin with OIG, which has the power to execute search warrants and serve subpoenas in connection with their investigation. In cases involving suspected Medicaid fraud, OIG has delegated its investigative activities to the MFCUs established by individual states. The majority of MFCUs are located within state attorney general (AG) offices. MFCUs have the power to issue subpoenas, serve and execute search warrants, and take sworn statements.
Choice of Law and Remedy: In dealing with Medicare and Medicaid fraud and abuse, law enforcement entities can choose among a wide array of criminal, civil, and administrative responses. On the criminal side, offenses can be addressed with general statutes or with health care-specific statutes. In addition to possible criminal liability, providers also are exposed to substantial civil liability for health care fraud under the False Claims Act (FCA) and the Civil Monetary Penalties law. The government in many cases will pursue both civil and criminal liability for the same action, in an effort to force a settlement.
Relevant Civil Statutes: The civil FCA is the government’s primary tool for combating fraud. The statute imposes liability on persons who knowingly present false or fraudulent claims to the United States, knowingly make false records or statements to get false or fraudulent claims paid, or conspire to defraud the government by getting a false or fraudulent claim paid.
The FCA permits private citizens, known as qui tam plaintiffs, or “relators,” to hire attorneys and file actions asserting violations of the FCA on behalf of the United States. DOJ has the opportunity to investigate the action and decide whether to intervene in the lawsuit and take the lead in prosecuting the action.
If the government declines to intervene, relators, sometimes known as “whistleblowers,” and their attorneys can proceed with the action. The incentive for relators and their attorneys is financial—if the action is successful, the relator receives up to 30 percent of the proceeds awarded.
Relevant Criminal Statutes: Multiple criminal statutes may be utilized for the prosecution of fraud cases, including conspiracy to defraud the United States, false statements, mail fraud, wire fraud, and money laundering.
The health care-specific federal statutes include kickbacks, health care fraud, theft or embezzlement, false statements, obstruction of criminal investigations, and money laundering.
Depending on the statute applied, those individuals or entities convicted of health care fraud face punishments that can range from fines of $1,000 to $250,000 and prison terms ranging from five years to 20-years-to-life, in cases where severe bodily injury or death are attributed to the case.
Provider Exclusion: In addition to penalties, a health care provider may be subject to expulsion from the Medicare and Medicaid programs. Mandatory exclusion is imposed when there is a felony conviction of fraud in certain circumstances. Exclusions may also be permitted when a provider’s conviction is related to the obstruction of an investigation, submission of claims for excessive charges that do not rise to the level of fraud, failure to disclose statutorily required information, and failure to provide required access to records.
One of the most potent weapons in the prosecutor’s arsenal, however, is the power to suspend and withhold a provider’s payments under Medicare, upon indictment or other reliable evidence of fraud.
Payments can be suspended without a hearing once the prosecutor has obtained an indictment. As a result, the government is able to exert tremendous pressure on targeted health providers to force a settlement.
Source: Dianne De La Mare, vice president of regulatory affairs, American Health Care Association (AHCA), Priscilla Shoemaker, legal counsel, AHCA; the Centers for Medicare & Medicaid Services; and the U.S. Department of Health and Human Services Office of the Inspector General