Government enforcement in healthcare fraud cases is likely to be particularly active in the near future. Individual criminal prosecutions will be more common.

• The Department of Justice has indicated that healthcare fraud still is a top concern.

• Prosecutors will not rely on whistleblowers as much as in the past.

• Data analytics is becoming a key tool in identifying ongoing fraud.

Federal prosecutors are pursuing healthcare fraud with no indication of letting up, so risk managers should redouble their efforts to find and eliminate anyone taking advantage of the system.

The government has taken a tough stance on healthcare fraud in recent years and will continue, says Megan Cunniff Church, JD, formerly a federal prosecutor and now a partner in the Chicago office of the law firm MoloLamken. She notes that the Chicago U.S. Attorney’s Office recently launched a healthcare fraud unit.

“There is going to continue to be an uptick in healthcare fraud prosecutions and investigations. The Department of Justice has made it quite clear with its ongoing prosecutions of doctors and other healthcare providers that this is an area ripe for more investigations,” she says. “In Chicago, they are putting prosecutors with a lot of experience and expertise on this fraud unit and pursuing these healthcare cases aggressively.”

A government watchdog agency report recently concluded that, while the Department of Health and Human Services (HHS) has been effective in addressing Medicare and Medicaid fraud, it still can improve its efforts. The General Accounting Office (GAO) report concludes that the Centers for Medicare & Medicaid Services (CMS) should more fully align its efforts with the GAO’s Framework for Managing Fraud Risks in Federal Programs, which describes best practices in preventing and detecting healthcare fraud.

The GAO report notes that CMS does not require fraud awareness training on a regular basis for employees, which it says could help create “a culture of integrity and compliance.” (The report is available online at: http://bit.ly/2Be22rc.)

“CMS is well positioned to leverage its fraud risk management efforts — such as demonstrated leadership for combating fraud, existing control activities, and stakeholder relationships — to provide additional antifraud training, as well as to develop an antifraud strategy based on fraud risk assessments for Medicare and Medicaid,” according to the report. “We recognize that the effort may be challenging, given the size and complexity of Medicare and Medicaid, and the need to balance antifraud activities with CMS’s other mission priorities. However, by not employing the actions identified in the Fraud Risk Framework and incorporating them in its approach to managing fraud risks, CMS is missing a significant opportunity to better ensure employee vigilance against fraud, and to organize and focus its many antifraud and program integrity activities and related resources into a comprehensive strategy.”

Less Reliance on Whistleblowers

Some investigations will involve whistleblowers as many healthcare fraud cases have in the past, Church says, but there also will be more use of affirmative data analytics. Federal agencies are improving their abilities to use data analytics to discover fraud in real time so that they don’t need rely as much on whistleblowers coming forward, Church says.

Prosecutors also will be pursuing more criminal charges against individuals, using traditional law enforcement techniques, she says.

“It won’t just be corporations and healthcare providers paying fines and working on compliance issues. It will be more individuals facing criminal charges for what they personally have done as part of healthcare fraud,” she says. “So, you’ll see more use of undercover investigations, confidential informants, wiretaps, a lot of the things you wouldn’t expect to see in white-collar cases. They will be using these tools to make sure the charges stick against physicians and other individuals involved in these crimes.”

Formalize Compliance Training

Risk managers should look carefully at billing practices of physicians and other professionals, Church says. Watch for billing patterns that seem unusual or revenue that seems too good to be true.

“The organization should have robust policies and procedures on billing, and staff members should be trained to recognize discrepancies and bring them to the attention of the right people immediately,” Church says. “Having policies and procedures is not enough if you allow retaliation against the people who sound the alarm. Those people should be rewarded for helping prevent bigger problems down the line.”

Training in billing processes and compliance should be as regular and formalized as training patient safety and similar issues, she says.

Church also suggests educating staff and physicians about the potential consequences for not following policies and procedures, particularly the potential for individual criminal prosecution.

“Make sure everyone understands that they have to be truthful and ethical, even though that sounds very basic,” she says. “That sounds like something you shouldn’t have to say out loud to people, but apparently it needs to be said in the healthcare industry.”


• Megan Cunniff Church, JD, Partner, MoloLamken, Chicago. Phone: (312) 450-6716. Email: mchurch@mololamken.com.