To be forewarned is to be forearmed. That ancient observation is especially true for those attorneys and health care providers who must deal with the massive power and breadth of the law enforcement arm of the United States government, the Department of Justice.

The landscape of health care fraud prosecution and defense in the United States is constantly changing. In such an environment, reliable statements as to current and projected strategies by the Department of Justice, Criminal Division, Fraud Section, are extremely valuable to all practitioners and, indeed, to any company or person engaged in providing health care services.

On April 13, 2016, some of this very valuable information from the Department of Justice was made available. Specifically, in a conference held in Chicago regarding health care fraud, Andrew Weissmann – who is the chief of the Fraud Section of the U.S. Department of Justice in Washington, D.C., and for all intents and purposes the federal government’s No. 1 health care prosecutor – made a number of interesting and extremely useful statements.

DOJ priorities on health care fraud

Weissmann, in his address to the white-collar defense attorneys, in-house health care entity attorneys and others at the conference, identified the following as DOJ health care fraud priorities for the foreseeable future:

  • Anti-kickback violations;
  • Pharmacy fraud;
  • Home health care fraud; and
  • Perhaps most noteworthy, a heightened emphasis on corporate health care fraud investigations.

That final point is signified by the recent establishment of the Corporate Strike Force of the Department of Justice’s Fraud Section. That entity, according to Weissmann, will seek to focus law enforcement resources in investigation and prosecution of larger corporate health care law violations, as opposed to smaller groups or individuals. He noted some of the common corporate health care violations his section will target, including:

  • Off-label drug use on a large scale;
  • Payment by large health care entities (such as hospitals and pharmaceutical companies) of “kickbacks” for patient referrals or prescriptions; and
  • Minimum hospital admissions requirements for doctors.

Increased resources

Weissmann also revealed that the DOJ’s Medicare Fraud Strike Forces (now established in nine locations: Miami, Chicago, Brooklyn, Detroit, Los Angeles, Houston, Tampa, Dallas and Southern Louisiana) are expanding with significant numbers of new personnel, a sure harbinger of more investigations and prosecutions.

Enhanced cooperation between the Strike Forces and the many local U.S. Attorneys’ Offices on health care fraud investigations was also noted.

Reliance on ‘big data’

Perhaps most interestingly, Weissmann spoke at length regarding the DOJ’s increasing use of “big data” to inform where its focuses efforts. In the health care field, he said, there is an enormous amount of data showing which providers are making claims for which services to government programs like Medicare, as well as against private insurers. By careful analysis of this data, the DOJ can identify anomalous or otherwise noteworthy changes in the amount and type of billing activity by health care providers. Federal prosecutors can now track the billing practices of doctors, pharmacies, hospitals, pain clinics and others and identify significant changes in their billing patterns. The DOJ then can— and, according to Weissmann, often does — initiate at least preliminary investigations into these abnormalities.

He observed that for other types of crime (such as organized crime or traditional forms of financial fraud), there simply isn’t the same amount of “big data” available regarding health care that the DOJ can use to direct law enforcement efforts. Weissmann, while quick to note that no one would ever be criminally charged based merely on data revealing abnormal patterns of billing, emphasized that the DOJ is developing ever more sophisticated methods of data analysis they intend to rely upon in targeting their resources.

Earning DOJ ‘credit’ for post-health care fraud remedial action

Weissmann also explained what the DOJ looks at when determining whether health care providers, in responding to a health care fraud violation, have taken sufficient corrective steps to earn more lenient treatment. Key attributes of such a post-violation response include:

  • Quality “root cause analysis” of the nature of the problems that led to the violation;
  • Identification of responsible parties;
  • A defined “fix” for the problems;
  • A strategic plan for the entity to go forward that avoids or minimizes the chances of any recurrence of such problems; and
  • An auditing procedure in place to monitor the entity’s future operations.

In addition, the quality of the internal investigation that an entity may conduct after a violation will be carefully scrutinized to determine whether it was, in fact, credible. In that context, Weissmann made reference to the now ubiquitous, if not notorious, “Yates Memo” which the DOJ released late last year identifying as a heightened priority the identification and prosecution of specific individuals responsible for wrongdoing in the corporate context. According to Weissmann, when entities seek to gain credit with the DOJ for having carried out internal investigations in the health care fraud context, the DOJ will look to see whether the investigation made serious efforts to identify responsible individuals and whether evidence about such individuals was turned over to the DOJ.

Practical takeaways

Based on this latest information from the DOJ, health care providers and the people who advise them would be wise to take a number of steps to better position themselves for the increased scrutiny that may very well be headed their way, including:

  • Corporations should recognize that the DOJ has clearly stated its intention to seek to hold both the corporate entitiesthemselves and the responsible individual employees or officers criminally liable for Medicare or other insurance frauds. The past practice of generally responding to larger health care providers’ health care violations in terms of civil sanctions may no longer be the DOJ’s approach.
  • Be prepared to explain significant changes in the type and amount of Medicare and other insurance billing in which you engage. Health care providers’ billing practices can experience significant changes for many reasons, including the development of new treatments, shifts in treatment emphasis or the addition of new personnel or equipment. Given that the DOJ is going to start initiating investigations based on patterns and changes in the “big data,” it would be wise for health care providers to prepare explanations, supported by their own data, for any such changes at the time the changes occur. If the DOJ shows up asking questions, the health care provider is then prepared to blunt or even end the investigation at the outset.
  • Have in place an appropriate and up-to-date plan for your organization to address possible Medicare or other insurance violations and possible government investigations, including identification of responsible in-house people to lead the response, root cause analysis procedures, and protocols to respond to government requests for information.
  • If a full internal investigation of possible Medicare or other insurance violations is deemed warranted, engage counsel who have the experience and credibility to satisfy the DOJ’s heightened standards regarding whether what has been done truly merits substantive government leniency.

Conclusion

While not altogether unexpected, nor a dramatic break with past DOJ policy and practice, Weissmann’s comments represent an up-to-date explanation of the DOJ’s priorities as to where and how they intend to expend their resources pursuing health care fraud. As such, the information is extremely valuable to anyone concerned about the possibility of becoming a target of a health care fraud investigation or defending others in that situation. As suggested above, once warned of what may be coming, health care providers and their counsel can, as the old axiom says, better arm themselves to protect their interests.