The government’s focus on healthcare fraud and abuse continued in 2021. Even stronger enforcement is expected by Biden’s new Secretary of Health and Human Services Xavier Becerra, who previously served as California’s Attorney General. The following trends seen in 2021 are expected to continue in 2022.
Kickbacks and Referral Arrangements. The government’s focus on referral arrangements and potential bribes and kickbacks shows no signs of slowing down. The government continues to scrutinize arrangements in which a referring individual or entity receives a benefit from an organization to which it refers business. These arrangements could include medical directorships, consulting arrangements, medical/marketing/management services organizations (MSOs), payments via entities with shared ownership, payments via marketers, research studies, placing employees in referring sources offices and others. While cases in this area span a variety of industries, the primary areas involve relationships with pharmacies, laboratories, durable medical equipment manufacturers and specialty services.
Covid – 19. Since the start of the Covid-19 pandemic in March 2020, Centers for Medicare and Medicaid Services (CMS) has examined how waivers and flexibilities offered by the government create new fraud risks to health programs. CMS has developed a fraud risk assessment process to identify potential risks and vulnerabilities associated with the same. Primary areas include the following.
- Performing additional, unnecessary services: Offering COVID-19 tests to Medicare beneficiaries in exchange for personal details, including Medicare information.
- Additional unnecessary laboratory testing: Requiring tests in addition to the COVID-19 test, such as expensive tests or services that do not test for COVID-19, such as respiratory testing, allergy testing, and genetic testing.
- Fraudulently obtaining COVID-19 health care relief funds: Filing false claims and applications for federal relief funds, such as those provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Provider Relief Fund, the Paycheck Protection Program (PPP) and Health Care Enhancement Act, or the Economic Impact Disaster Loan (EIDL) program
- Health care technology schemes: False and fraudulent representations about COVID-19 testing, treatments, or cures that are used to defraud insurance carriers and investors.
https://oig.hhs.gov/publications/docs/hcfac/FY2020-hcfac.pdf, p. 13.
Telehealth. Telemedicine has been a growing area and COVID-19 has accelerated that growth. Several provisions in the CARES Act relaxed telemedicine rules. In addition to the CARES Act, there have been other legislative and policy changes on both the national and state levels. However, based upon recent investigations and indictments, these policy changes do not make providers immune to healthcare fraud investigations. Providers should be vigilant with their telehealth practices by thoroughly documenting all patient encounters and not entering any arrangements that could be suspect under the Anti-Kickback or other bribery statutes.
Opioids. Controlled substances and opioids will continue to be a government focus. Defendants in these actions include manufacturers, doctors, and marketers. The allegations can include unlawful drug distribution, unnecessary prescribing, fraudulent marketing, and kickbacks. https://oig.hhs.gov/publications/docs/hcfac/FY2020-hcfac.pdf, p. 28-29.
Electronic Medical Records (EMR). Electronic software is increasingly used in the medical area. However, the government is examining whether the development and marketing of EMR allows for the manipulation of increased payments from government programs and private insurers. See https: //oig.hhs.gov/publications/docs/hcfac/FY2020-hcfac.pdf, p. 18. Thus, providers should be careful that their medical records regarding both services provided and necessity for the same are not similar or identical for each patient, suggesting that the record may be inaccurate.
Insurance Company Referrals. One of the biggest changes in the healthcare fraud arena is the dramatic increase in insurance company referrals to state and federal governments. The government seems more receptive to pursuing cases involving largely or entirely private payor funds. Some of these cases are due to a misconception that if a provider does not accept government funds, they are immune from certain statutes and government prosecutions.
False Claims Act (FCA)/Whistleblower Actions. FCA activity is expected to increase under the Biden administration. The DOJ obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year 2021. Approximately $5 billion of this amount involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. Significant 2021 cases involved opioids, the Medicare Advantage Program (Medicare Part C), kickbacks, unnecessary medical services, procurement fraud, and COVID-related fraud. https:// www.justice.gov/opa/pr/justice-department- s-false-claims-act-settlements-and-judgments-exceed-56-billion-fiscal-year.
Coordinated Prosecutions by the Healthcare Strike Force Teams using Data Analytics. Strike Force Teams utilized data analytics and the combined resources of federal, state, and local law enforcement entities to prosecute complex health care fraud matters and opioid cases. The strike force is comprised of inter-agency teams consisting of investigators and prosecutors that focus on the worst offenders in regions with the highest known concentration of fraudulent activities. First established in March 2007, Strike Force teams currently operate in 24 districts across the United States, including Dallas, Texas. https://oig.hhs.gov/publications/docs/hcfac/FY2020-hcfac.pdf, p. 12.
Regulatory guidance. The Biden administration reversed Trump administration actions to restrict enforcement actions based on sub-regulatory guidance documents. (“Sessions Memo” and “Brand Memo”). Specifically, on July 1, 2021, Attorney General Merrick Garland issued a memorandum formally rescinding the DOJ 2017 and 2018 memoranda and restoring the DOJ’s traditional approach regarding the reliance on sub-regulatory guidance. https: //www.justice.gov/opa/page/file/1408606/download (“Garland Memo”). The impact of this change could be significant in the healthcare industry, as CMS and the Department of Health and Human Services have used sub-regulatory guidance as the basis of FCA actions. It will be interesting to see if there will be an increase in traditional healthcare false billing cases based upon the reversal of Trump era memoranda.
Aggressive Enforcement by the Biden Administration. Consistent with the sentiment that corporate and healthcare fraud will be a top priority of the Biden administration, Deputy Attorney General (DAG) Lisa Monaco recently announced the Department of Justice’s (DOJ’s) new approach to prosecuting corporate crime. Htttps://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute. The administration will (1) prioritize individual accountability and demand more information from corporations in investigations; (2) consider all prior misconduct and evaluate whether pretrial diversion is appropriate for corporate repeat offenders; and (3) more frequently require corporate monitors. The effect of these policies will certainly be seen in healthcare fraud investigations and prosecutions.