It is estimated that health care fraud is a $60 billion a year business fueled by illegal conduct such submitting false claims and paying kickbacks to physicians and suppliers. Until recently, if large health care organizations were the targets of fraud investigations, these companies, as their penance, typically wrote a big check to the government and continued business as usual. Things have changed.
While indicting and convicting health care executives is not a new practice, officials at the Department of Health and Human Services (“DHHS”) and the Department of Justice (“DOJ”) are said to be frustrated with the frequent occurrence of repeat violations and they are ramping up their strategy. Lately there have been aggressive new initiatives rolling out to combat rampant health care fraud and the government is increasingly bringing criminal charges against executives even if they were not complicit in the fraud scheme, but could have stopped it if they had known.
What’s more striking is that in addition to civil monetary penalties and criminal indictments, the government is taking great efforts to exclude convicted executives from being involved in companies that do business with federal health programs. A recent bill introduced to Congress under the name of the “Strengthening Medicare Anti-Fraud Measures Act of 2011 (the “Act”), increases DHHS’ existing powers and allows them to seek to exclude owners, officers and mangers of companies that are convicted of health care fraud from federal healthcare programs even if they left the company prior to any conviction of the entity.
In addition to the expansion of the permissive exclusion afforded by the Act to DHHS, regulators and law enforcement officials are going to be increasingly utilizing current permissive exclusion remedies. DHHS’ bold move appears to be based on the rationale that the permissive authority of Secretary of DHHS or the Office of the Inspector General of DHHS to exclude individuals is a much easier process than criminal proceedings.
The impact of this aggressive new government strategy will likely have even further reaching consequences for convicted healthcare business owners and executives. For instance, an exclusion from being part of a business that works with federal health care programs would be a career ending blow for most executives. It should also be emphasized that smaller organizations are not in any way immune from enforcement activity. In fact, with newly increased enforcement budgets, authorities have the means and the time to target organizations of all sizes.
Law makers and regulators are hopeful that by ramping up the enforcement of existing laws and expanding the scope of DHHS’ power, it will act as a powerful deterrent against overt acts and will compel corporate executives to take proactive steps in preventing fraudulent activities and affirmatively addressing fraudulent practices when discovered. It is vitally important now more than ever, to have an active compliance program in place. A strong compliance program can not only detect and prevent fraudulent or negligent activities but also will typically be considered as a mitigating factor if an organization is culpable of fraudulent activity. The Florida Healthcare Law Firm works with health care organizations of all sizes to assist in the audit, development and implementation of effective compliance programs.