Health Care Law Blog

Health Care Fraud and Abuse Enforcement - It's Not Just Hypothetical Anymore

On February 11, 2013, the Departments of Justice and Health and Human Services jointly released a report stating that the government recovered $4.2 billion in fiscal year 2012 and for every dollar spent on health care-related fraud and abuse investigations in the last three years, the government recovered $7.90. The report indicates that this is the highest 3-year average return on investment in the 16 year history of the Health Care Fraud and Abuse program. The Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), which has operations in Detroit, was instrumental in this recovery effort.

The report affirms that President Obama is making the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration.  In addition, the government will continue to improve its efforts to reduce fraud and abuse using new tools and resources provided by the Affordable Care Act.

Moreover, the report discloses that the Department of Justice and U.S. Attorney’s Office have obtained settlements and judgments under the False Claims Act. The matters settled include:

• Unlawful pricing by pharmaceutical manufacturers;
• Illegal marketing of medical devices and pharmaceutical products for uses not approved by the Food and Drug Administration;
• Medicare fraud by hospitals and other institutional providers; and
• Violations of laws against self-referrals and kickbacks.

We cannot stress enough the importance of structuring agreements between physicians, hospitals, and other institutional providers within the federal Stark law exceptions, when physicians are involved, and the Anti-Kickback statute safe harbors.

Providers may not always appreciate the importance of analyzing whether these laws apply to their transactions and structuring them within the applicable exceptions and safe harbors when they do. Often, providers may have structured relationships for many years without considering the applicability of these regulations. Other parties may not want to consider them because they may hinder their interests financially. However, this news release underscores that compliance with these laws isn’t just a theoretical exercise; non-compliance can result in very real financial and criminal consequences.

If you have questions regarding these laws and how they may affect your next business deal, please contact a member of our Health Care Practice Group, which is very experienced in analyzing these situations and recommending how to comply with the applicable laws.

Categories: Fraud & Abuse, Health Care Reform