Detroit: How To Defend Against Healthcare Fraud Allegations – The National Law Review

Healthcare providers across the country are facing increased scrutiny from federal law enforcement agencies like the Health and Human Services Office of the Inspector General (OIG), the Centers for Medicare and Medicaid (CMS), and even the Department of Justice (DOJ). Providers based in Detroit are even more likely to be investigated for healthcare fraud charges due to the local team of healthcare fraud inspectors.  
These investigations are inconvenient, and allegations of fraud can cripple a healthcare provider.
Many healthcare fraud cases and allegations begin when someone – usually a disgruntled current or former employee – brings evidence of purported wrongdoing to a law enforcement agency for review. Even if this is done out of revenge or to capitalize on a portion of any eventual recovery collected under the False Claims Act (31 U.S.C. § 3730(b)), the substance of that alleged healthcare fraud can pose a significant threat to a healthcare provider.
Preventing these whistleblower claims from ever making it to law enforcement is essential. While contractual provisions that forbid employees from making them will not be enforced in court, healthcare companies can incentivize internal reporting, instead. This allows the company to conduct an internal investigation to find out if there was wrongdoing or not, and to take any necessary steps to protect its interests.
However, these internal investigations have to be legitimate to work. If it is clear that the internal reporting mechanism is a sham that is meant to hide evidence of wrongdoing, then employees will bring whatever evidence they have to law enforcement and undermine the very existence of the internal reporting system.
Many allegations of healthcare fraud are levied under the federal False Claims Act, which forbids false or inaccurate claims for compensation from a federal government program, like Medicare or Medicaid. Importantly, these allegations can be pursued as civil or criminal charges and cases, based on whether there was an intent to defraud the program. If law enforcement can show an intent to defraud the program, it can be a crime. 
The intent is always one of the most difficult things for law enforcement and prosecutors to prove. It requires getting inside a defendant’s mind. Because this is impossible, the intent is generally shown through circumstantial evidence: Statements and events that indirectly provide clues about a suspect’s intentions. 
As Dr. Nick Oberheiden, founding partner of the healthcare fraud defense law firm Oberheiden P.C., says,
“A skilled healthcare fraud defense lawyer can raise reasonable doubts about these pieces of circumstantial evidence by showing how they all have innocuous, non-criminal, and reasonable explanations. Doing so can prevent a False Claims Act case from becoming a criminal one.”
Of course, successfully combatting that evidence of intent, through the help of skilled healthcare fraud defense attorneys, still leaves the civil False Claims Act allegations. These cases carry significant penalties, even if they do not involve prison time. Defendants face paying treble damages – three times what they received in the claims against the government program – plus a fine for each false claim made. Additionally, healthcare providers will also likely be excluded from billing government programs in the future, undercutting their ability to earn revenue.  
The likelihood of facing a healthcare fraud investigation exists everywhere. However, the risks are higher in Detroit because the region has been singled out for more intense enforcement, largely due to the high number of people who are enrolled in federal healthcare programs like Medicare and Medicaid. 
Acting under the theory that more Medicare and Medicaid patients would mean that there would be more claims for government reimbursement, which therefore means more fraud, the DOJ and OIG collaborated in May 2009, to create the Health Care Fraud and Enforcement Action Team (HEAT). This is a group of dedicated healthcare fraud investigators, tasked with detecting and enforcing fraud committed by healthcare providers.
HEAT squads are located in nine different cities in the U.S., with one of them located in Detroit.
With more resources and a higher degree of skepticism on the side of law enforcement, healthcare providers in Detroit who participate in federally-funded healthcare programs face an increased risk of being investigated for health care fraud.
The two best ways to avoid a conviction or civil judgment for healthcare fraud in Detroit are to develop strict compliance procedures and conduct internal auditing to ensure that those rules are being followed. 
These rules do not just reduce the likelihood of a criminal conviction or civil judgment; they also reduce the chances that law enforcement will receive or collect evidence of wrongdoing that triggers a healthcare fraud investigation.
Creating a compliance strategy is not something that healthcare providers should take lightly. These rules have to cover every regulation that has been promulgated by the numerous federal government agencies that oversee and enforce healthcare law. Compliance rules have to be all-encompassing, or else they risk providing a false sense of security. Bringing in outside counsel that is skilled in healthcare fraud defense can be the best way to ensure that the resulting compliance protocol is sufficient. 
But writing the rules only goes so far. Employees have to be adequately trained and re-trained so they know their role and the risks of straying from it. Executives need to know how to respond to an audit or the signs of an upcoming investigation.
This is where internal auditing can prove to be invaluable. By hiring outside help to conduct an internal audit for signs of healthcare fraud, healthcare providers can make sure that their compliance strategy is on the right track, is being followed, and will insulate the company from some serious civil or criminal penalties.
Unfortunately, many healthcare providers see these measures as unnecessary and needless expenses. All too often, though, they find that what they would have spent on compliance and auditing is only a fraction of what they end up spending in defending against a healthcare fraud allegation in Detroit.
About this Author
Dr. Nick Oberheiden focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation. He has defended clients in PPP Loan Fraud cases and COVID-19 investigations. Nick also directs internal corporate investigations and he leads defense teams in whistleblower actions, corporate defense cases, as well as cases involving national security and elected officials.
Clients from more than 45 U.S. states have hired Nick to seek effective protection against government…
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