You may have noticed an uptick in healthcare-related fraud headlines over the past few months.
The Department of Justice recently announced record-breaking settlements in four separate cases regarding fraudulent hospital billings, including one where a Miami hospital is accused of billing the federal government for unnecessary procedures and services that were never performed. Meanwhile, prosecutors are said to be developing at least seven other suspected criminal cases against hospitals.
Meanwhile, the healthcare industry has also seen numerous False Claims Act (FCA) cases where whistleblowers allege that medical centers submitted false Medicare or Medicaid claims to federal health programs through fraudulent or “upcoding” billing practices. In addition, these cases often involve allegations of off-label marketing of pharmaceuticals and other kickback schemes involving doctors and pharmacies.
The reason for these cases now coming to light is likely twofold: the recent health care reform legislation has put a much finer point on identifying and removing fraud, waste, and abuse from government-funded programs such as Medicare and Medicaid; and secondly, whistleblowers play an essential role in exposing wrongdoing that might otherwise remain hidden – this includes false claims submitted to government health care programs.
The federal government has become very aggressive about prosecuting present and former employees who know their employer’s fraudulent activity. This is done to send a clear message to employees regarding compliance with all laws and regulations that govern conduct in an organization or practice.
According to healthcare attorney John LeBlanc of Manatt, this trend is not expected to slow down anytime soon.
“Hospitals are in the crosshairs of federal prosecutors who are vigorously pursuing both civil and criminal liability,” LeBlanc told us in a recent interview.
However, hospitals are not alone in their legal troubles surrounding healthcare fraud.
According to Reuters, “pharmaceutical companies are facing renewed scrutiny over whether they have done enough to police the distribution of prescription drugs.
“Drug distributors will also face more oversight under rules that aim to keep painkillers and other controlled substances out of the hands of those without a medical need for them, as an epidemic of abuse and addiction to opioids continues.”
Theranos, a company that purports to revolutionize the blood testing process, is also under intense scrutiny over allegations of healthcare fraud.
A Partner at Manatt, LeBlanc’s practice includes False Claims Act litigation, corporate investigations, and compliance counseling for health care providers, pharmaceutical manufacturers, and medical device companies. He has deep experience in helping clients work through compliance-related challenges and controversies.
LeBlanc says the Theranos case is likely to be one of several such cases brought against healthcare technology companies in the near future. “I imagine we’ll see more criticism and litigation around the marketing claims made by these companies,” he said.
LeBlanc concluded that there is little industry-specific guidance to date but suggests that the healthcare industry should take a comprehensive approach towards compliance.
“Healthcare organizations should create an internal culture of compliance by establishing clear rules and guidelines for employees related to compliance, ethics, and fraud awareness,” he said. “They should also develop an effective mechanism for reporting concerns internally so the compliance officer can promptly address them.”