Happy new year: Fraud and abuse investigators try a different approach

Former prosecutor warns not to underestimate the feds’ resources

Letters threatening legal action under the False Claims Act may no longer be appearing in many provider mailboxes, but don’t get too comfortable just yet, a former state and federal prosecutor warns.

That’s because investigators have more resources than ever to search for health care fraud, abuse, and waste.

Since the outcry of last year’s mass mailing initiatives, the U.S. Department of Justice in Washington, DC, agreed to tone down its demand letters. Mary Grealy, JD, senior Washington counsel for the American Hospital Association’s office in Washington, DC, says she has not heard of any new mass mailing initiatives although rumors are surfacing that some providers are receiving letters about the outpatient lab unbundling investigation.

"I would be surprised to see 400 letters go out in [one] state with the same tone and same requirements [as the former initiatives]," she says.

"I’m hoping that as the result of the legislative push and the guidelines that have been issued, the investigations will be much more focused and there will be an attempt to establish that legally and factually [the letters are being used for a] violation of the False Claims Act as opposed to being used for an overpayment collection system," explains Grealy.

Grealy says she has seen a different tone in more recent letters. "There has been a recognition that they needed to change the way they were approaching the investigations and the type of letters they were sending. [But], we want to make sure that at the end of the day, we are not just talking about form over substance."

In the normal course of business, providers are going to be overpaid as well as underpaid, she continues. "Even under the OIG’s [Office of the Inspector General’s] False Claims Act enforcement guidelines, if an overpayment is below a certain threshold, it should be repaid to the fiscal intermediary or the carrier. You don’t need to bring in the OIG or the Department of Justice. We think that the resources of the Department of Justice and the use of the False Claims Act are serious things that should be used for serious matters." (For information about the OIG’s 1999 work plan, see p. 3.)

Resources abound

The Department of Justice and Congress added resources to health care fraud investigations and prosecutions through legislation such as the Health Insurance Portability and Accountability Act (HIPAA) of 1996, says Mark A. Cameli, a shareholder in the litigation department at Reinhart, Boerner, Van Deuren, Norris & Rieselbach, in Milwaukee.

Cameli was an assistant U.S. attorney in both the criminal and civil divisions of the U.S. Attorney’s Office in the Western District of Wisconsin. He also served as chief of the Civil Division in that office.

"Offices have hired additional staff such as investigators. U.S. attorneys’ offices have hired investigators, auditors, and prosecutors who are dedicated just to health care fraud and abuse cases," he adds.

Providers should keep these additional resources in mind, as well as legislation that criminalizes actions that in the past were not considered criminal on a federal level, Cameli explains.

"Under HIPAA, new crimes have been codified that carry stiff penalties depending on whether the fraud is in connection with someone being hurt or [killed]. Depending on the consequence of the action, penalties can range up to life in prison," Cameli says.

"Other penalties include fines, restitution, civil judgments, injunctive relief, and disbarment from participation in [federal health care] programs," he says. (For information about the new Healthcare Integrity and Protection Data Bank, see p. 4.)

Providers also should be aware that although investigators are focusing on Medicare, fraud allegations can extend to any federally funded health care plan, such as one that covers veterans’ or military benefits. "It’s a far-reaching jurisdiction for types of offenses, and HIPAA has even expanded that into private health care plans," warns Cameli.

In addition, providers should be aware of parallel proceedings in which criminal and civil actions are pursued in tandem. This can give a provider exposure in both areas, criminally and civilly.

The additional resources and penalties for fraud and abuse investigations underscore the need for providers to invest in preventive health care in the context of fraud and abuse, Cameli says. "Minimize your liability starting with ensuring that you are in full compliance with the terms and conditions of the participation in the Medicare program."

Structure a plan

A structured plan is an important part of the compliance effort, notes Cameli. A plan should incorporate continuing education of staff and a process for reporting and remedying fraud and abuse. (For more information about the American Health Information Management Association’s new health information management compliance guide, see p. 7.)

Cameli also strongly recommends that providers seek legal counsel. "I can’t underscore the importance of having counsel involved, someone who is experienced in these areas and understands how civil, criminal, and regulatory aspects of health care fraud and abuse are interrelated," he says.

"Steps can be taken that not only minimize the incidence of fraud and abuse but protect you in the event that you are accused of committing fraud and abuse," adds Cameli.

Providers also should review their compliance plans on an annual basis, he says. Guidelines are released on a fairly regular basis, and they might render provisions of a compliance plan obsolete or incomplete. "It’s important that you not only position yourself so that your services are in compliance with the law, but that your plan is reviewed periodically by people who have experience in this area."

Providers who become involved in a dispute or a fraud and abuse case may find assistance from Reinhart, Boerner, Van Deuren, Norris & Rieselbach’s Trial Science Institute. The institute uses a courtroom inside the law firm to try mock trials in front of representative juries.

The courtroom can become a laboratory where lawyers are trained to become better trial attorneys. For providers charged with criminal and civil fraud, the firm can try the case to see whether the jury is likely to be swayed into finding that fraud exists or doesn’t exist.

The courtroom setting also allows the firm to do what is called a discovery focus. "We ask a jury what kind of information they would like to have and what information would make a difference in their view as to whether someone was committing health care fraud," Cameli says. "Then we can tailor and streamline our trial preparation so as to make that [information] the centerpieces of our defense."

The courtroom also provides a venue for alternative dispute resolutions. "If a provider is charged with health care fraud, we can do a mediation or use other tools that are offered under alternative dispute resolutions," he explains. In addition, the institute provides a private venue to adjudicate grievances between providers. "This is for companies that don’t want to air their dirty laundry in a public courtroom."

Editor’s note: For more information about the Trial Science Institute, contact Mark A. Cameli or Ralph Weber at Reinhart, Boerner, Van Deuren, Norris & Rieselbach, Milwaukee. Telephone: (414) 298-1000.