How to Make $4.1Billion in 12 Months: Healthcare Fraud and Abuse Enforcement Mark Bartlett Davis Wright Tremaine, LLP.

How to Make $4.1Billion in12 Months: Healthcare Fraud and Abuse EnforcementMark BartlettDavis Wright Tremaine, LLP

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Why Is This Man Smiling?

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Health Care Fraud Enforcement: Top DOJ Priority

Government recovered almost $4.1 billion in health care fraud actions during FY11, up 58% percent from 2009

More than 700 criminal convictions

"This is an unprecedented achievement -- and it represents the highest amount ever recovered in a single year," said Attorney

General Eric Holder

Health Care Fraud Enforcement: Top DOJ Priority

December 19, 2011 DOJ Press Release

– Over $3 billion in FCA civil settlements and judgments in Fiscal Year 2011• 2nd consecutive year over $3 billion• $270 million HCF investigation funding increase

FY12

$2.4 billion recovered from fraud involving federal health care programs – Over $6.6 billion recovered under FCA since

January 2009

FCA: Settlements/Judgments

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

500

1000

1500

2000

2500

3000

3500

$$ in

mill

ion

s

Source: DOJ “Fraud Statistics – Overview” (Dec. 7, 2011)

Settlements or Judgments in Cases Where Government Declines Intervention As Percentage of Total FCE Recoveries

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Health Care Fraud Statutes

False Claims Act (Civil)– Imposes liability on any person who knowingly

submits, or causes to be submitted, a false or fraudulent claim to the Federal Government

Anti-Kickback Statute (Criminal)– Prohibits knowingly and willfully offering, paying,

soliciting, or receiving any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program

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Health Care Fraud Statutes

Stark Law (Civil)– Prohibits a physician from making a referral to

an entity in which the physician has an ownership interest or compensation arrangement

Health Care Fraud (Criminal)– Prohibits knowingly and willfully executing a

scheme or artifice to defraud any health care benefit program

PPACA Anti-Fraud Provisions

Anti-Kickback Statute

– Codifies lower scienter– Violation constitutes “false claim” under FCA

False Claims Act– Narrows definition of “public disclosure”

Overpayments– Providers must report and return any

overpayment within 60 days

Increase provider exposure to administrative, civil and criminal liability

2011 Health Care Fraud Criminal Enforcement

September 7, 2011

– DOJ charges 91 individuals with Medicare fraud-related offenses, including fraudulent billings over $295 million, the largest single takedown in Strike Force history

September 16, 2011– Lawrence Duran, the owner of a mental health

care company, American Therapeutic Corporation, was sentenced to 50 years in prison for orchestrating a $205 million Medicare fraud scheme

Moving Beyond CIA’s Expansion of the Park Doctrine

Inspector General Levinson – excluding corporate officers influences corporate behavior without impacting patient access to care– 883 individuals and entities excluded 10/10 to

03/11

Purdue Frederick Oxycontin prosecution– $600 million criminal fines and civil sanctions– Corporate executive misdemeanor pleas

• 4 months later, 20 year exclusion (reduced to 12)

New Goal: Exclusion even where no guilty plea

A Brave New World: Fraud Detection in 2012

CMS use of predictive modeling and algorithms

Electronic billing

Stop pay first and ask questions later

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CMS Benefit Integrity Contractors

Recovery Audit Contractors– Tasked with identifying and collecting improper

Medicare payments, paid on contingency basis

Comprehensive Error Rate Testing– Analyze error rate data and develop plans to

reduce improper payments

Responding to Subpoenas

Grand Jury Subpoenas

– Used in criminal cases only– Determine if you are target or simply third party

Parallel Proceedings

– Administrative Investigative Demands– Get as much information as possible as quickly

as possible HHS OIG Subpoenas

Execution of a Search Warrant

Always be polite and cooperative, but never consent to expanded search or voluntary interviews

– Inform agents that they are not to speak to anyone

Gain as much information as possible

– Ask the purpose of the visit– Names and titles of all agents– Copy of search warrant (mandatory) and

affidavit (discretionary)– Monitor all items that are removed

We Are All Boy Scouts

“BE PREPARED”

Designate a single contact person to meet with all government visitors

– In-house attorney, head of security, human resources• Have at least one back-up point person

Ensures company speaks with one voice and permits company to control documents

Never Talk to Strangers

EDUCATE ALL EMPLOYEES

– Employees have the right to talk or not talk to investigators

– Employees have the right to talk with counsel before deciding whether to consent to a voluntary interview

– Employees have the right to have counsel present during any interviews

Remember: it is the employee’s decision, not the company’s decision, whether to consent to be interviewed

The Best Defense

A robust, real Corporate Compliance Program can solve many problems

Mandatory ethics training

Commitment from the top

Effective response to problems

Contact

Mark BartlettPartnerDavis Wright Tremaine [email protected] direct206.794.0705 mobile