Legal Services for Owners of Medical Facilities
The owners of medical facilities have to be wary of criminal liability for their actions. If you own a health-related facility, there is a possibility of the actions of your employees being held out as your own actions through agency theory. In addition, if you put any scheme in place that is brought forward through your employees or on your own, you may face criminal liability.
Owners of healthcare facilities such as hospitals or nursing homes are often in the news for the schemes that they put into place to defraud insurance companies or their patients. These owners may be held both criminally and civilly liable under federal laws and they may face lawsuits from their patients directly.
Some convictions can come from and through:
- HIPAA violations
- False Claims Act
- Healthcare fraud
- Stark Law
- Several other criminal violations
As an owner, you should make sure you can control your practices and your employees to work within compliance of criminal healthcare laws.
One way a lot of investigations begin is through the whistleblower reimbursement scheme that pays individuals who come forward with evidence and sues the healthcare facility. The whistleblower may get between 15-30% of all money received through penalties for fraud violations.
In addition to vicarious liability for the actions of those who work for your practice, you may also face criminal charges for your own personal actions. When you commit an act, it is easy to assign fault. But when it is your employees, the fault might come through your inaction or sanctioning of illegal activities.
You should contact an attorney to represent you for any criminal allegations. It is important to know if you need to retain an attorney on your own or to represent your whole practice because the practices best interest might not align with you, especially if there are other owners or shareholders.
You should seek the advice of a lawyer to determine how you would best be represented with these charges. You may face jail time and significant financial penalties if you or your practice are found to be committing violations. You should get ahead of any investigations by getting an attorney to help guide you through the investigation process.
Basic Healthcare Charges
There are a variety of different charges that you may face as an owner of a health care facility for your own actions and schemes or for the schemes of others.
Healthcare fraud is a common charge and comes up when you as a practitioner or practice participate in a scheme to make money for services that were never rendered or participating in a scheme to make extra money off of referrals.
You may also face problems that several other types of business owners may face such as tax evasion or embezzlement, but this article will focus on crimes more specific to owning health facilities.
As an owner of a health care facility or practice, you may be held civilly liable for the actions of your employees; however, you may be able to avoid criminal liability. There are two main ways that you can face criminal liability:
- You act in a way that is in violation of the law.
- You put into play a scheme or direct others to violate the law.
Depending on the crime, you may face liability if you are the one benefiting from the crime and you endorsed the activity or knew of the criminal activity and willfully turned a blind eye.
There are several federal statutes that cover health care fraud that you may be charged under. The two main federal criminal laws are Health Care Fraud 18 U.S. Code Section 1347 and the False Claims Act.
Health Care Fraud, 8 U.S. Code Section 1347, makes it illegal to knowingly defraud a private insurance company or a government insurance program. Some of the more common schemes are discussed below.
Criminal punishments for health care fraud include:
- 10 years in prison without a cause of serious injury due to health care fraud
- $250,000 in fines
- 20 years in prison with a cause of injury due to health care fraud
- Life in prison with a cause of death due to health care fraud
If there are HIPAA violations from your practice, you may face civil violations between $100-$50,000 for each violation with an annual cap between $25,000 and $1,500,000. If you are knowingly violating patients privacy under HIPAA, you may face criminal penalties of up to 10 years imprisonment and $250,000 fine.
The False Claims Act provides criminal punishment for submitting false records or claims to the government. A violation of the False Claims Act, regardless of whether you are knowingly or blatantly ignorant of it, may hold you accountable under this law. False claims charges for owners are common because if the owner is blatantly ignorant, they may be charged.
Violations of the False Claims Act may come with a punishment of $11,000 for each false claim, plus up to three times the damages to the government for the claim. Criminal liability under this law can be assessed only if someone knowingly makes a false claim. The criminal punishment for this is a fine up to $250,000 and up to 5 years imprisonment.
Kickbacks under 42 USC Section 1320a-7b(b) involves the act of receiving a kickback, as being defined as knowingly receiving any money of any kind for a referral. If your company is receiving kickbacks, you may face up to 5 years imprisonment as well as criminal monetary penalties up to $25,000.
Investigations Procedures and Process
Investigations into your practice may uncover several wrong practices. It is important to understand your liability for each specific wrong act so you should talk to our experienced health care attorney that will be able to outline if your liability will be criminal.
An investigation into your practice can come in many forms such as an audit, undercover investigations, patient interviews or interviews with your workers. When any of your workers are speaking to an investigator, it may be a prudent investment to retain an attorney to represent all of your workers.
If one of your workers incriminate themselves or the company, you may face liability so having our attorneys represent all of your workers could help you in the long run.
It is also important to understand the difference between an attorney representing you, your practice or your employees. If you retain the same attorney to represent all of these parties, it may help coordinate efforts, but there is a chance you might want to distance yourself from an employee who was participating in illegal activities.
You should work to audit or investigate internally to make sure you are in compliance with all of the health care laws. You should look into and routinely check on all of your employees to ensure compliance. This type of review of your own company can ensure compliance and help you to address any current problems.
If you or your practice are suspected of violating a health care law, the government may begin an investigation. In these types of investigations, there are many potential pitfalls because your practice may have multiple different people that may be interviewed or questioned. For your own liability, you should work with your own attorney to figure out liability.
A government investigation will also likely involve questioning. If you or any of your employees are questioned, you may request to have an attorney present for questioning. An attorney will help assert your rights and make the questioning process much easier for you.
An experienced attorney will help you throughout a government investigation by helping to work to assess the evidence and to help plan a strategy to deal with the investigators. Just because you are under investigation, it does not mean that you have done anything wrong or that you will get charged.
However, having an attorney from the onset of an investigation may increase your odds of defeating any healthcare fraud allegations. Through audits, investigations, and whistleblower suits evidence of criminal activity may come up, and charges may be brought against you. If the Attorney General’s Office feels that there is enough evidence, they will bring charges.
After charges are brought there will be a grand jury hearing where the grand jury will decide if there is enough evidence to indict. Before a grand jury hearing, it is important to speak to an attorney to help you prepare for the hearing because there is a chance to get the charges dropped during the grand jury hearing.
When you have been indicted, your attorney and the government may work towards a settlement on the case or move towards dismissal of the case. If there is no settlement or dismissal, your case will most likely end up getting a trial date. Your attorney should work with you to review all of the evidence and prepare your best defense for trial.
For all of your criminal convictions, you will also have the right to have a trial before a jury of your peers.
In-Depth Look at Healthcare Charges
As an owner, there are several charges you may face, and there are certain practices you should be looking out for to make sure that you may not face criminal liability.
If there are any HIPAA violations, it means that you or your employees are breaching your patient’s privacy by disclosing sensitive information. There are ways you may knowingly or unknowingly disclose information such as texting results to a client or not having a secure server. Work with your attorney to see if you are in compliance and remedy any practices or problems.
Kickbacks and bribery charges are also charges that you as an owner may face. For kickbacks, you are getting paid for referring patients to other practices. Under these charges, you have to be careful about your contracts that are formed with other practices in the field of referrals. You should have an attorney review all of your contracts to make sure you are in compliance.
As stated earlier with the charge health care fraud there are several schemes that can lead to healthcare fraud. The topic of healthcare fraud is rather large, and there are several different schemes that are all prosecuted by the federal government.
The act of billing for patients that are never seen or do not exist usually reaches up to the level of the owner of practices because they usually are the direct beneficiary of getting more patients. For this scheme, it is common for patients’ names to be made up, or to start billing double for practices.
If you are under investigation for these types of practices, you should with the assistance of counsel, look through all of your reports and try and find any non-existent patients. There could be a problem with one of your employees making these records, and you should have plans in place to address these actions.
Some legal strategies involved with the non-existent patients could revolve around distancing yourself from a practice that you neither condone nor even knew about to avoid criminal liability. Also, you should work through all of the reports to try and make sure you were in compliance.
Going forward make sure that there are proper recording methods to address these types of problems from ever occurring.
Another scheme that might come up for owners is the act of billing for services not rendered. There is a particular problem with many inpatient and outpatient facilities that work with patients on a regular basis.
This act involves billing for treatments of patients when there was no treatment given, and it is common within this field because often health care professionals think they may be able to get away with it.
Investigations are performed by:
- The DOJ
- The Attorney General’s Office
They are typically prosecuted under the False Claims Act, the Health Care Fraud Statute, and other fraud crimes. The investigation will look to see what you billed your mental health patients for and try and figure out if there was ever any work performed.
For the act of billing for services not rendered, you should speak to an attorney about what practices you perform and how you keep a detailed record. It is important to always keep a record of any billed activities, so you can defend against these fraud claims.
Another common scheme is billing for non-covered services as a covered service. One of the most common instances covered under this scheme is billing for group therapy when there is no group therapy going on or billing for a medical procedure like liposuction as some medically necessary procedure.
If you are caught billing Medicare and Medicaid for these types of activities, you may see criminal liability under the False Claims Act.
The investigation into this will usually involve questioning of patients and providers to try and see what activities were going on during the purported billable activity. There is a good chance that there will be some evidence of what activities were done. So it is important to not bill for improper activities.
You should contact an attorney to make sure you are in compliance with the healthcare laws and if you are under investigation. The investigation process into these charges can be long and cumbersome so having an attorney to speed up the process can really make a difference.
Also if you are charged, an attorney will be able to find out what evidence the prosecutor has to be able to defend against the evidence. It is important that you retain an attorney during the investigation process and especially if you are charged. An experienced attorney will know what problems you may face as an owner.
Effects of Fraud Violations
You need to, as an owner, be aware of the repercussions, both civilly and criminally, for your actions as an owner and leader of a medical facility. The range of punishments includes:
- Criminal charges with jail time
- Monetary penalties and reimbursements
- Loss of license
- Reputational harm
When a practice such as a hospital or nursing home is under investigation, it might be the doctors or staff who are at fault. But most blame or fault often gets shifted onto the owners of such facilities. You, as the owner, take some level of responsibility for your employees’ actions, and those violations may impact you directly.
If convicted of Health Care Fraud, you may face:
- 10 years in prison
- 20 years in prison, if your actions cause serious injury
- Life in prison if someone dies as a result of your actions
Under the False Claims Act, you could face up to 5 years for submitting false reports to Medicare and Medicaid. Under HIPAA you also may face up to 10 years.
The sentences that could potentially befall you may not only result in imprisonment but also reflect negatively on you due to your criminal record. A criminal record will follow you around. And as the owner of a medical facility, it will be hard to get your facility to maintain supporters or staff, with a negative record over your head.
Reimbursement and monetary penalties tend to add up quite fast when you are found to have violated healthcare laws. There are several cases of owners having to pay out millions or even billions of dollars for schemes that they put into place.
Every year the federal government gets billions of dollars recovered from fraudulent claims, which come from successful cases and settlements with healthcare professionals.
If you are a practicing medical professional that owns a clinic or firm, you may also lose your medical license if you are found in violation of the law. Several states may prevent you from practicing in their state by revoking your medical license, which prevented you from practicing – especially when your acts were harming patients.
Importance of Defense
You with the assistance of your attorney need to get ahead of allegations of violations of healthcare laws. As an owner, it might be wise to have our law firm on retainer for you and your practice to work at the onset of any investigation. It is critical to work at every stage from investigation to a potential trial to try and defeat the allegations against you.
If you are convicted, it you will not only suffer criminal fines, but jail time and money loss as well, which is why it is important to hire the best attorneys possible to defend you. Also, your attorney should be proactive to make sure you are also in compliance with the law to avoid problems in the first place.
As an owner, if you find any of your workers are not in compliance with the law, you should work with an attorney to remedy these problems. The owner is usually the one who can make the final say on your employee’s practices, so you should set strict guidelines with disciplinary action, if the employees are not in compliance.
You should with the assistance of an attorney work to also know if and when you should report your employees’ actions to the authorities. The implications on you, if you are condoning illegal activity, can be severe. So, working to avoid and distance yourself from these situations is advised.
Patients and loved ones are often the source of complaints against medical practices. A simple mistake or something more severe may trigger an investigation following complaints. Understanding what happened, what was reported and what the authorities are searching for is important in a criminal investigation.
An attorney will help sort out what discrepancies there are and work with the authorities to help remedy or explain any potential problems.
When you are under investigation and get charged, the prosecutor may charge you under multiple statutes to see what sticks. An experienced attorney should know how to handle these multiple charges: for example, if the crimes overlap, or if there are unfounded crimes listed, the attorney will work to get these excess charges dropped.
As an owner of a medical facility, it is extremely important to understand what the implications are against you personally, as opposed to the group, as a whole, as well as against certain employees. For any criminal conviction, the prosecutor will need to show that you specifically acted or failed to act to commit an offense.
If there were a case against you, a possible defense would be that you were not the one who committed the offense – showing you did not have the culpable mental state and you committed no illegal action.
As an owner, you and your practice need to keep accurate and detailed records of all insurance based claims, and of all services you provide. All levels of the medical profession from administration to the doctors need to keep vigiliant records, and make sure there are no law violations.
All employees need to be trained on the proper procedure, and on the law to make sure they are in compliance. So, seek the help of an attorney, if there are any questions about your compliance, or any past problems and how to remedy these problems. As an owner, you should have a good plan in place to prevent future problems and to address any past mistakes.
If you are under investigation or charged with any healthcare-related crime, you should speak to a lawyer. If you are proactive in working with your attorney, you may be able to avoid charges or lessen the severity of any charges. Communicating with the authorities might beforehand end up might incriminate you. As such, always have an attorney present during questioning.
Our attorneys understand the needs of owners of health facilities, and the intricacies of the law. We will can help you create a customized course of action to defend you against allegations of criminal activity. Contact us today to work on both compliance and any civil and criminal defense charges for healthcare-related fraud associated with your practice.