The Department of Justice’s sweeping arrest of nearly 250 people for healthcare fraud yesterday shows that they are still following an approach long used by narcotics investigators. By investigating and prosecuting healthcare professionals like drug dealers, the DOJ risks creating long term and even unintended consequences for healthcare professionals.

In an article for the American Health Care Association entitled Healthcare Fraud is the Quiche of the ‘80s, I pointed out that the government is investigating healthcare fraud with the same linear approach it investigates drug cases: identifying someone with “low level” culpability, developing informants, working up the chain-of-command to the “leaders” of the operation, take a picture with a big pile of drugs, declare victory, celebrate, repeat.

Yesterday the government revealed another page from its playbook – the roundup.

When I was a narcotics prosecutor our efforts yielded awards. We called our operations Sudden Impact. Indict lots of offenders but hold back and arrest them all at once. Why do this? There are some very legitimate benefits. First off, it does draw attention to a serious problem. The allegations of 243 defendants and over $700 million in fraud is significant (and just the tip of the iceberg). Furthermore, when we arrested 50 local drug dealers in one day – we suddenly noticed other known dealers leaving town. Why? The dealers knew what they had done but did not know who we had arrest warrants for and did not want to wait around to find out! Presumably, this sweep may deter those who are committing (or considering) healthcare fraud.

However, there are very real problems with applying these approaches to healthcare fraud.

The investigative approach of trading up the criminal “chain-of-command” only works if the degree of culpability follows a consistent progressive hierarchy. In healthcare fraud that not always true. Who is prompting or encouraging the fraud varies. It could be the owner, the patient, the nurses, the doctors, the recruiters, the billers… anyone involved in the transaction can lead it astray. The government’s assumption that physicians and other healthcare professionals should face the most punishment, and investigating accordingly, can yield miscarriages of justice.

The consequences of roundups is that it does scare people away – but not always the right people. Healthcare professionals are under attack and many quality professionals feel like even an honest mistake will subject them to scrutiny for potential fraud. They are not wrong. Many quality and honest healthcare professionals are deciding that being presumptively viewed as suspects is just not worth it. Some are leaving healthcare – others, more commonly, are abandoning the Medicare and Medicaid system – thus denying the recipients of government-sponsored healthcare access to quality healthcare providers. The government needs to be aware of the unintended consequences of its actions – no matter how laudable its motives may be.

There are lessons to be learned:

  • The war is on. Healthcare is under attack. Whether civil, administrative, or criminal – there are consequences. Innocence does not entirely insulate you from consequence because exoneration comes at a cost. Investigating and defending these allegations is not inexpensive and too many people only remember the allegation – not the outcome.
  • Perform a checkup. Healthcare professionals should heed their own advice and obtain some preventative care. The days of honest mistakes are over and one should address a problem before it becomes acute.
  • The roundup is coming soon to a city near you. Getting out in front of it – understanding and evaluating your exposure – and establishing policies and practices to minimize any future exposure is just what the doctor ordered.