September 29, 2016
The federal government recovered $1.9 billion in healthcare fraud violations in 2015. Late last year, an article in Modern Healthcare suggested that, because whistleblowers can receive up to 30% of a fraud recovery settlement, we would see qui tam cases “driving the U.S. Justice Department’s enforcement—exponentially multiplying the government’s regulatory eyes inside healthcare facilities.” Recent rulings in False Claims Act and Stark Law cases confirm the validity of that prediction.
Estimates vary when calculating the money lost to fraud—it’s difficult to measure that which is undetected—but the Federal Bureau of Investigation (FBI) states that healthcare fraud costs the country tens of billions of dollars each year. Paying for law enforcement, legal resources, and sophisticated technology to combat the problem adds to the price tag. Unfortunately, taxpayers and employers endure the financial brunt of fraud along with other factors that increase healthcare costs.
But, with elements of healthcare reform designed to drive value-based care and reduce healthcare costs—and with the success that the government has had in prosecuting fraud—the Department of Justice (DOJ) and the Centers for Medicare and Medicaid Services (CMS) continue to ramp up the fight against regulatory and compliance violations.
Earlier this week, the U.S. House Ways and Means Oversight Subcommittee conducted a hearing on healthcare fraud investigations. Participants in the hearing testified that progress is being made against fraud and abuse, but there is still much work to do. In his opening statement, subcommittee Chairman Peter Roskam (R-IL) noted, “One aspect of the problem is that not only are taxpayers impacted, but many fraud schemes actively harm patients.”
With changes in reimbursement models creating additional financial pressures and shifting provider dynamics driving more physicians to seek employment within the hospital system, there is growing potential for wrongdoing. Unnecessary surgeries, tests, and treatments are not in the patients’ best interests, but can be lucrative when gone unchecked. Kickbacks and illegal referrals cloud clinical decisions and incentives to overprescribe opioids have helped create a nationwide epidemic. Clearly, healthcare fraud is not a victimless crime, providing yet another reason for patients to play an active role in their care by asking questions of their physicians and other providers.
Not all wrongdoing is intentional, however. Complexity in our healthcare system means that physicians and hospitals need to be especially vigilant to ensure that compensation agreements, referral practices, and other activities are in line with current legislation. In his ruling on the Toumey Healthcare System case, Judge Albert Diaz expressed concern about the complexity of the Stark Law and the possibility of even well-meaning attorneys giving incorrect advice.
Trusted legal counsel and knowledgeable compliance professionals, along with effective training and awareness programs for physicians and other staff, are more important than ever. So, too, is making sure that your allied healthcare providers do business in a way that protects your best interests.
Long gone are the days of the single country doctor making house calls. Today’s healthcare environment is a vast system of interconnected services where bad behavior can hide in the complexity of communication, a network of specialists, and dense legal agreements. It’s important for all of us to remember that, in the end, providing healthcare is about one person caring for another. Each of us is responsible for our industry, the quality of care we provide, and the integrity with which we provide it.