Legal Counsel for Hospitals and Healthcare Systems
Our firm has attorneys have years of experience helping individuals that are being prosecuted for fraudulent practices in hospital and healthcare systems. Our aim is to assist individuals and organizations in understanding the nature of the allegations and providing the best legal representation possible.
Charges of fraudulent practices in the healthcare system or a hospital can affect many individuals involved in the operation of these facilities. Anyone involved in fraudulent practices in these settings can be charged with healthcare fraud.
Our attorneys are experienced and can help you understand the charges being brought against you.
If you or a loved one has been charged for a fraudulent practice in a hospital or other healthcare setting, please call us now.
What is Health Care Fraud?
Healthcare is the fastest growing sector in the US and employs more than 18 million individuals.1 There are thousands of hospitals and tens of thousands of outpatient clinics.2 Pharmacies are even more prevalent. The services provided in healthcare generate trillions in revenue every year.3
The daily operation of these facilities is incredibly diverse and expansive. Custodial staff, IT operations, maintenance crews, technicians, physicians, billing, administration, volunteers, board members, executive officers, pharmacists, caseworkers, nurses, etc. – all play an integral role in healthcare.
Some facilities employ thousands while others may only employ a handful. Due to the complexity and difficulty of managing these services and the impossibility to ensure every healthcare claim is legitimate, there may be a temptation to engage in fraudulent practices. Billions of dollars are lost every year due to healthcare fraud.4
Fraudulent practices in hospitals and healthcare systems is a serious offense that carries hefty fines, a potentially lengthy period of incarceration, and loss of licenses. Knowingly submitting a healthcare claim that is false, no matter how seemingly small or trivial, it can lead to charges and subsequent prosecution. These charges can cause a severe detriment to all involved, either directly or indirectly.
What is Fraud in Hospitals and Healthcare Systems?
Fraud in hospitals and healthcare systems is where an individual(s) knowingly submits false claims. Submitting these false claims can violate a number of different federal statutes such as the False Claims Act, Stark Law, Anti-Kickback Statutes, Health Care Fraud statute, etc. Many states have similar provisions to these statutes.
This usually arises in the following situations where you knowingly:
- Overbill the patient.
- Submit the same claim twice — a practice known as double billing.
Submit claims for patients that did not receive care.
- Submit claims for services that the patients did not receive or did not need.
- Submit claims under one patient’s name for the benefit for an individual other than the named patient.
- Refer patients to any individual or organization with whom you have a financial relationship.
- Conspire to commit any of the aforementioned practices.
If you have any questions about the legality of any practices, activity or behavior at a your hospital system, feel free to give us a call. We will be more than happy to provide a free confidential legal consultation.
Who can be held liable for fraud in hospital and healthcare systems?
Anyone seeking to defraud the government or conspiring to commit fraud can be held liable.
Many times, the Department of Justice, usually pursue claims made by large hospitals or other organizations, whose fraudulent claims are often tens of millions of dollars and sometimes are even hundreds of millions of dollars.
It is important to note, that even though healthcare is a trillion-dollar industry, smaller practices with comparatively small amounts in false claims, can be fully prosecuted under the law.
A St. Louis physician was fined and ordered to pay restitution for filing claims for patients he did not see. The claims, over a 4-year period, amounted to a little over 100,000 dollars. 5
This amount may seem small especially compared to some settlements that are hundreds of millions of dollars as discussed below in our Press Release section.
Remember, it does not have to a be high dollar amount in order to be charged with violating the law. If you knowingly are submitting false claims, you may be prosecuted.
To ensure that you are complying with the law, there a few statutes of which you should be aware.
What is the False Claims Act?
The False Claims Act, sometimes known as the Lincoln Law, prohibits individuals or organizations from knowingly defrauding the government for financial gain.
This law also contains what is commonly referred to as a “whistleblowing” provision. It allows individuals who are not affiliated with the government to bring suit on behalf of the government. Most of the time, these are employees of organizations that are aware of the fraudulent practices of their employer. It incentivizes individuals to file suit by allowing a portion of the settlement to be awarded to the “whistleblower.”
The law specifically provides penalties for individuals who act with knowledge that the claims they are submitting are false. Knowledge, as defined in the act, is the individual having actual knowledge, a reckless disregard for the truth or falsity of the information, or deliberate ignorance of the truth.
It does not even matter if your intent was to defraud the government or not. It only matters if you knowingly submitted a false claim. Essentially, if you submit a claim and are aware that it is false or that it may be false, you can be held liable for penalties under the False Claims Act.
Penalties of Violating the False Claims Act
Violations of the False Claims Act have a penalty of up to 10,000 dollars, three times the value of the cost incurred due to the false claim, and any costs of a civil action brought against the individual. Also, an individual may be in violation of the healthcare fraud statute which carries higher fines and criminal penalties. See below.
Stark Law is another federal law that provides civil penalties for physicians that refer patients to laboratories or dedicated health service organizations with whom they have a financial relationship. This also applies if the immediate family member of the physician has a financial relationship with the entity. This is called physician self-referral, and it applies to Medicare and Medicaid patients.
Also, this law is known as a “strict liability” law. This means that you do not even need to know that your referral was against the law. If you refer a patient to an entity in which you have a financial interest, it will violate the law.
This law provides a few exceptions, “safe harbor rules,” which will ensure the physician is in full compliance with the law. One exception allows a physician to refer a patient “in-office” for ancillary services, such as X-Rays. There are more exceptions, and if you would like to discuss them further, don’t hesitate to call us.
Penalties of Violating Stark Law
Violations of Stark Law carry a penalty of 15,000 dollars for each prohibited referral, three times the amount of the Medicare or Medicaid payment, and possible exclusion from Medicare or Medicaid in the future. 7
What is the Health Care Fraud Statute?
The Healthcare Fraud Statute institutes criminal penalties for any individuals or organizations who knowingly defraud or conspire to defraud a federal health care benefit program.
This statute covers a portion of the False Claims Act. While that act carries civil penalties, violations of that act may also violate this statute which will carry a criminal penalty as well.
These are some common ways that individuals in hospital and healthcare systems violate the statute:
- Falsifying services rendered to patients that never occurred.
- Using deceitful or coercive tactics to have patients receive unnecessary medical services.
- Submitting the same claim to several different insurance companies.
- Falsifying documentation in order to approve certain medical procedures
- Inflating patient’s diagnoses to be worse than they are to receive a larger payment.
- Billing for a brand name drug, while giving the patient a generic, and pocketing the difference.
- Referring patients to organizations in which you have a financial incentive. (See Stark Law above and the Anti-Kickback Statute below)
- Discovering an overpayment and not remitting the payment.
- Billing one patient on behalf of another individual.
- Billing and documenting patient encounters that never occurred.
- Keeping a patient hospitalized longer than is medically necessary.
Healthcare fraud is a very serious offense. And in some cases, it has resulted in tragic consequences for patients, which carries an even more significant criminal penalty.
Penalties of Violating the Health Care Fraud Statute
Violations of the Healthcare Fraud Statute has a fine of up to 250,000 dollars, up to ten years imprisonment, possible exclusion from federal healthcare benefit programs, and loss of licenses. If a patient is seriously injured or dies as a result of such fraudulent practices, the individual could be imprisoned for life.
What is the Anti-Kickback Statute?
The Anti-Kickback Statute is a federal law that provides criminal penalties for any individual who makes a referral to another individual or organization and receives remuneration for these referrals.
One common way this occurs is a pharmaceutical company will offer an incentive for physicians to prescribe medications offered by their practice. The incentive does not have to be money. It can be a reduction in prices, gifts, or another item of value.
Like the Stark Law, there are exceptions with the Anti-Kickback Statute. Due to the complexity of these exceptions, we encourage you to consult with us if you have any questions or concerns.
Penalties of Violating the Anti-Kickback Statute
Violations of the Anti-Kickback Statute have a fine of up to 50,000 dollars, imprisonment up to five years, three times the value of the remuneration, and possible exclusion from federal healthcare benefit programs.
It is important to note, that many of these statute’s penalties are based on the severity of the fraudulent activity and your history of fraudulent activity. Remember, even if it is a first offense, the full penalty for breaking the law can be assessed.
Who Investigates Allegations of Fraud?
There are a few federal agencies that investigate allegations of fraud, and many individuals and organizations are prosecuted with violations. These agencies include:
- The Office of the Inspector General (“OIG”);
- The U.S. Department of Health and Human Services (“HHS”);
- The Department of Justice (“DOJ”) Health Care Fraud Unit;
- The Federal Bureau of Investigations (“FBI”) Health Care Fraud Unit;
- The National Insurance Crime Bureau (“NICB”);
- The National Association of Insurance Commissioners (“NAIC”).
- The Coalition Against Insurance Fraud (“CAIF”);
- The Medicare Fraud Task Force.
Due to the seriousness of any allegation of defrauding the government, these agencies conduct rigorous investigations. These agencies will usually collaborate and share their information with local prosecutors.
How Can I Protect Myself If My Department is Under Investigation for Fraud?
In general, it is a very good idea to make sure all documents and claims are accurate. Many healthcare offices use a billing department that double checks all claims before they are submitted.
Also, it is helpful to inform your employees of the importance of accurate records and not to falsify information. You may wish to refer them to this page for future reference or have a possible training to keep your practice updated with the law.
It is also crucial that the whole document is accurate. Falsifying even a small part of a claim would constitute fraud, and you can be held liable.
What Should I Do If I Am Being Investigated For Fraud? - Call us!
Investigators will likely verify records by talking with patients, other providers, coworkers, insurance agents, etc. They will also look for inconsistencies with other records and see if there is a pattern. Investigators will try to ascertain your intent reasonably.
Did you knowingly falsify these records? This is a very hard burden to prove unless there is clear and convincing evidence to the contrary. However, this will often be determined by statements made to the investigative agency from yourself, usually, before you have obtained counsel to represent you.
If you are being investigated for healthcare fraud, we recommend that you do not make any statements to these investigators until you have fully consulted with an attorney specializing in healthcare fraud. Our attorneys have years of experience and will help you to the full extent of the law.
Important to note, if you lie or try to derail an investigation of healthcare fraud you can be prosecuted for obstructing a healthcare fraud investigation.
Cases of Fraud in Hospitals and Healthcare systems
Pharmacist sentenced to 17 years in prison for a 30-million-dollar Scheme
Charge: Conspiracy to commit fraud, violating anti-kickback statutes
Allegation: Pharmacist and employee along with co-conspirators defrauded TRICARE out of millions of dollars through a complex scheme that involved kickbacks and unnecessary medications.
In 2018, a pharmacist and his employee were both sentenced to prison for over 15 years each. Through a complex scheme that involved physicians and “marketers,” the pharmacist would give kickbacks to physicians to prescribe a very expensive topical cream.
According to the DOJ press release, Serge Francois and Patrick Tonge created a scheme to have local physicians prescribe physicians a group of topical medications that could cost up to 17,000 dollars a bottle.
In return, doctors would receive a kickback for each of the prescriptions sent. The pharmacist used a group of individuals called “marketers” to arrange these deals with the physicians. Francois would then submit these prescriptions to TRICARE for payment and would split the dividends among the fellow co conspirators.
It was found that some of these prescriptions were prescribed to patients that were never seen by the prescribing physicians. Also, these prescriptions were renewed automatically, regardless if needed by the patients.
TRICARE and FEHBP (another federal healthcare benefit program) paid in excess of 30 million dollars. Francois used these funds for his personal benefit, including a mansion and expensive cars.
This scheme was discovered in 2017 and Francois and Tonge were sentenced to 17 years and 15 years 8 months in prison respectively.
To learn more about this case, click here. Or copy and paste the link below.
Hundreds of individuals charged in massive healthcare fraud exceeding a billion dollars in losses.
Charge: Conspiracy to commit healthcare fraud, False Claims Act violations
Allegations: Licensed healthcare professionals prescribed unnecessary medications and/or services, including opioids, and other individuals aided in a scheme to defraud Medicare, TRICARE, and Medicaid.
In, 2017, 412 individuals, including nurses and physicians, were charged with participation in health care fraud schemes. The losses due to the fraudulent activity are roughly 1.3 billion dollars. These individuals were widespread across many federal districts in many states and marks the largest takedown in healthcare fraud in history.
According to the DOJ press release, these individuals were involved in creating schemes to defraud federal insurance programs by prescribing unnecessary medications or services. Most of the medications never made it to the patients with the prescription or the services were never performed.
These individuals are currently being investigated and prosecuted, and no conviction or sentencing updates are available.
To read the full press release, click here. Or copy and paste the link below:
Hospital chain to pay hundreds of millions of dollars to resolve fraudulent activity.
Charge: Conspiracy to commit healthcare fraud, violation of the False Claims Act and Anti-kickback statute.
Allegations: Exaggerated claims of emergency department (ED) fees, outpatient services billed as inpatient services, and provided kickbacks to physician referrals.
In 2018, a hospital chain in Florida agreed to pay over 260 million dollars to resolve the numerous fraudulent allegations.
According to the DOJ press release, Health Management Associates (HMA) agreed to pay over 260 million dollars to the federal government to absolve itself of criminal and civil liability. HMA had policies in place that resulted in kickbacks to the physicians and increased inpatient status in its emergency departments.
HMA instituted a policy for its emergency departments that each department must meet a benchmark of admitting a certain number of patients that come into the emergency department. 15-20 percent of all ED patients were to be admitted and 50 percent of all patients aged 65 and older.
HMA executives would threaten to fire any physician that did not increase hospital admittance. This induced physicians into admitting patients into the hospital from the emergency room, even if it was not medically necessary.
As part of the payment, two hospitals operating under HMA were providing kickbacks to physicians that were providing referrals were resolved of these violations.
If you would like to read the press release, click here. Or copy and paste the link below:
Speak With An Experienced Health Care Fraud Attorney.
Allegations of healthcare fraud, or other violations, cab very detrimental to you, your family, career, and anyone else closely involved.
Our attorneys have the experience and knowledge to defend any charge of healthcare fraud properly. Their knowledge and expertise extend to both civil and criminal charges, both on a state and federal level. We can help you with any charge.
As evidenced by the recent press releases, these charges can result in substantial sentences, that could lead to devastation. Do not hesitate to call us for a free legal consultation.