Last week, in my capacity as president of the American Health Lawyers Association, I attended the first National Summit on Health Care Fraud, a joint undertaking by the U.S. Department of Health and Human Services and the U.S. Department of Justice. The conference brought together private sector leaders, law enforcement personnel, and health care experts as part of the Obama Administration’s coordinated effort to fight health care fraud. This was the first national gathering on health care fraud between law enforcement and the private and public sectors.

I. Presentations and Trends

Leading the morning session, HHS Secretary Kathleen Sebelius vowed to “prevent, catch, and discourage fraudsters,” stating “Criminals – your days are numbered.” She promised an aggressive new fraud prevention focus, including enhanced Medicare Strike Force activities in a number of US cities, and continued coordinated, multi-agency initiatives under HEAT – the Health Care Fraud Prevention and Enforcement Action Team Secretary Sebelius also stated that, next week, the President’s budget likely will request an additional $1.7 billion in funding for fraud prevention and detection.

Attorney General Eric Holder disclosed that, in 2009, DOJ charged over 800 individuals in health care fraud cases, and obtained 580 convictions so far. DOJ also recovered billions of dollars in False Claims Act (qui tam) recoveries. He also promised that future fraud-busting efforts will include actively engaging the private sector (including Medicare beneficiaries recruited to serve on “Senior Medicare Patrols”), the insurance industry, and health care providers.

A panel comprised of representatives from CMS, FBI, OIG, DOJ, and others who have worked on what they call “the viral fraud cases in the Miami-Dade area” (i.e., spreading like a virus) told stories about the highly-aggressive and coordinated tactics and techniques they now employ. An Assistant United States Attorney who serves as the South Florida Health Fraud Coordinator, Luis Perez, said the days of prolonged subpoena productions, accountant analyses, extended research into cases, and deference to white collar defendants, are over: “We arrest everyone,” he said. His team of government agents and prosecutors seeks to bring the highest possible provable charges as offenses are committed, and then bring in additional evidence during the sentencing phase in order to seek upward adjustments under the Sentencing Guidelines to obtain maximum prison times.

The CEO of the Tufts Health Plan in Boston, James Roosevelt, highlighted anti-fraud tactics increasingly employed by private payers. For example, Tufts has hired Nick Messuri – formerly head of the Massachusetts Attorney General’s Medicaid Fraud Control Unit and a well-known, tough prosecutor in the state – as head of its antifraud group, which includes nine other attorneys. Tufts and other payers conduct their own clinical and other investigations relating to medical necessity, upcoding, miscoding, overutilization, outliers, illegal referrals, and more. Tufts currently has 128 open investigations, some of which are being conducted in cooperation with governmental entities to which it has made reports.

II. Investigative and Enforcement Predictions

During the afternoon, attendees were divided into discussion groups to consider such issues as effective law enforcement tactics, the role of states in fraud prevention, effective use of data, and more. A report on the break out-sessions will be published in the future, but some of the common themes I observed – and the future actions I predict – are as follows:

1) There will be heightened cooperation and more aggressive, coordinated enforcement in the public and private sectors to combat fraud, abuse, and waste. The main focus used to be Medicare fraud – now it is health care fraud across-the-board.

2) Increasingly, efforts will be directed at fraud and abuse prevention, and pre-payment scrutiny, rather than just focusing on “pay-and-chase” enforcement. CMS and private payers will be seeking to justify deviating from “prompt pay” requirements in the name of fraud and abuse prevention. A number of speakers commented that investment in health care fraud provides a multiple return – for DOJ, it was a $4 return for every dollar; for Tufts, a $7 return for every dollar; and for OIG, an $8 return for every dollar.

3) There will be increased attention paid to data coordination. Currently, Medicare, Medicaid, and private payers collect and maintain data in different ways, making utilization and other “pattern” comparisons difficult. This is going to change.

4) Governmental entities are directing their resources in a more data-driven and targeted way in order to identify fraudulent patterns. For example, they know that “fraudsters” who used to operate in Miami-Dade are moving up Route 95 into South Carolina and other states. Data shows that those who defrauded fee-for-service programs for a specific item or service, e.g., orthotics and diabetes supplies, are now moving to defraud Medicare Advantage plans. Providers sanctioned and excluded in one state are moving to another. Some of these schemes have worked in the past – but they will not in the future.

5) There will be greatly increased efforts to engage the general public – Medicare beneficiaries, their families, and others – in whistleblowing.

III. What Does All of This Mean for the Future?

None of us committed to health care in America would countenance or want less than full punishment for “real” health care fraud. Unquestionably, many of the cases cited at the Summit fall in this category – billing for services not rendered, beneficiaries selling their Medicare numbers, false certifications by physicians for items of durable medical equipment, dental clinics pulling children’s teeth unnecessarily to obtain Medicaid payment, clinics billing for outmoded infusion therapy for HIV/AIDS patients, and more. I applaud aggressive and coordinated investigation and enforcement efforts to rid our system of these practices and their perpetrators, and the fraud-fighters in the government clearly are a very smart, very dedicated group

I worry, however, that the zeal for health care fraud enforcement will inappropriately ensnare committed, compassionate health care providers, suppliers, and manufacturers. In our practice, we are increasingly seeing qui tam relators – whistleblowers – with dollar signs in their eyes, bringing questionable and even frivolous actions against their employers or former employers. We are seeing overburdened prosecutors taking years to make qui tam intervention decisions – while the relators continue to work and gather “data” at their employers’ places of business, to “support” their cases.

I worry about Medicare contractors, eager to keep their contracts, trying a little too hard to prove to CMS that they are fraud-conscious. I have several supplier clients on 100% pre-pay Medicare review facing significant potential disallowances because a contractor decided for the first time to implement a technical Medicare manual provision about recording a specific date of service – when there is no question from the medical record that medically necessary, physician ordered, and readily documented services were in fact provided.

I worry about constitutional due process. One private insurance company representative at the Summit suggested that the government send announcements to all private payors when any qui tam cases are unsealed, so that the insurance companies can place “edits” on claims filed by the defendants, or at least pre-payment reviews – well before the case has been decided. I worry that the “arrest them all” enforcement mentality will harm the reputations and future livelihood of individuals not yet tried, who are later exonerated.

There are no easy answers. At a minimum, though, in this rapidly-evolving investigative and enforcement environment, health care providers, suppliers, and manufacturers need to concentrate more than ever before on compliance. Moreover, their compliance efforts need to be real and not token ones, including comprehensive training, and internal auditing and monitoring with real consequences for employees and representatives falling short. The stakes are very high, and the so-called “radar screen” that companies used to joke about “flying under” now reaches all the way to the ground.