On Thursday, June 18, 2015, Attorney General Loretta Lynch announced that the Medicare Fraud Strike Force, in conjunction with seven local U.S. Attorney’s Offices, had charged 243 individuals, across 17 federal districts, in the largest Medicare fraud takedown in U.S. History. The charges, which include conspiracy to commit healthcare fraud, wire fraud, money laundering, aggravated identity theft, and violations of anti-kickback laws, implicate $712 million in false Medicare billing submissions.
Drawing a hard line, Assistant Attorney General Leslie Caldwell, who has the primary responsibility for policing healthcare fraud, emphasized companies also face risks when their healthcare personnel, including doctors and nurses, violate healthcare laws because they risk prosecution as accomplices or as aiders and abettors. AAG Caldwell noted that “we are speeding up our investigations,” and that the government will be “focusing on bringing corrupt medical professionals, as well as their accomplices, to justice more quickly than ever.” These statements have serious potential ramifications for healthcare providers and companies of all sizes. Heightened scrutiny and systems for detection mean increasing numbers of individuals and companies, including those mistakenly identified and investigated, could face healthcare fraud allegations and charges.
In general terms, accomplice liability is “criminal responsibility of one who acts with another before, during, or (in some jurisdictions) after a crime.” Aiding and abetting liability is “civil or, more typically, criminal liability imposed on one who assists in or facilitates the commission of an act that results in harm or loss, or who otherwise promotes the act's accomplishment.” The government has traditionally taken very expansive views of these concepts. Under existing rubrics, companies that employ healthcare providers abusing Medicare, process payments on their behalf, or otherwise benefit financially from fraudulent billings may be investigated or prosecuted as complicit in or to the fraud. And, even if no prosecution results, the government is likely to seek the return of any ill-gotten gains and fraudulently obtained funds received by companies.
The Medicare Fraud Strike Force (the “Strike Force”) was created in 2007, and since its inception has charged over 2,300 defendants in connection with over $7 billion of improper Medicare billing and fraud. The Affordable Care Act (the “Act”) increased the funding for fighting healthcare fraud by hundreds of millions of dollars—allowing the expansion of the Strike Force from two cities to nine, as well as the hiring of many more prosecutors. In clarifying language regarding sentencing and loss, the Act had the effect of increasing prison sentences, “particularly in the most egregious cases.”
Now part of the Healthcare Fraud Prevention & Enforcement Action Team, commonly referred to as “HEAT,” the Strike Force’s involvement and leadership in the most recent takedown evidences its increasing sophistication and enforcement capacity. HEAT, a joint initiative between the Department of Justice and the Department of Health and Human Services, is tasked with preventing healthcare fraud and enforcing existing laws. With the increased funding under the Act, an aging population, and the express commitment of AG Lynch and other Department of Justice personnel, healthcare fraud investigations and prosecutions are likely to continue to rise over at least the next three to five years. It is likely that this $712 million takedown is only the beginning—well below the zenith—of fraud prosecutions to come.
Companies need to assess their own obligations and compliance with healthcare laws, as well as the compliance of their individual physicians and medical personnel. In addition to numerous federal laws and regulations, companies are also well-advised to consider local and state laws overlapping or imposing additional requirements.
BakerHostetler is uniquely poised to assist clients of all sizes assess their needs, address any concerns, and remediate any problem areas. Our attorneys are equipped effectively to represent companies in connection with the False Claims Act, federal Anti-Kickback Statutes, Stark Law, and Civil Monetary Penalties Law. The White Collar and Healthcare Industry teams have deep experience in the healthcare sector defending providers against allegations of fraud and substantial experience investigating internal (whistleblower) and external claims of misconduct. Moreover, the firm’s White Collar Defense and Corporate Investigations team is co-chaired by the former Chief of the Securities and Healthcare Fraud Unit for the Office of the United States Attorney for the District of New Jersey and the former Chief of the Long Island Office of the Eastern District of New York, two districts that were, and continue to be, on the forefront of healthcare fraud prosecutions.