Healthcare Provider Fraud Investigation.

Medicare payment reviews are often triggered by government data analytics and other information that suggest there may be an issue with a provider’s billing. CMS billing data can highlight statistical outliers that warrant further scrutiny, and whistleblower complaints or payer audits can spark healthcare-fraud inquiries. Once an issue is identified, CMS will usually order a review by a Medicare contractor.

What are RACs, ZPICs, and UPICs?

Several different types of Medicare contractors (and federal agents) are involved in Medicare fraud investigations, and each has different functions.

• RACs, Recovery Audit Contractors (RACs) review Medicare payments in order to determine whether there were overpayments or underpayments, and the government generally compensates RACs on a contingency basis related to how much money they help CMS recover.
• ZPICs/UPICs, Unified Program Integrity Contractors (UPICs) and other program integrity contractors conduct Medicare reviews and are generally referred to as ZPICs (Zone Program Integrity Contractors) when they are reviewing Medicare billing, and ZPICs/UPICs may refer cases to law enforcement; MICs are Medicaid Integrity Contractors, while Medicaid Fraud Control Units are MFCUs.
• CMS agents, In addition to its contractors, CMS also has agents who can investigate providers directly when necessary.
• U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) agents, When necessary, CMS can refer healthcare-fraud investigations to the Department of Health and Human Services Office of Inspector General (DHHS OIG).

What Does it Mean When the Government Reclassifies a Medicare Audit as a Fraud Investigation?

If the government reclassifies a Medicare audit as a fraud investigation, this means that the government believes that the provider has intentionally billed Medicare incorrectly. Fraud is a matter of intent, and if the government has reclassified its review from a payment review to a fraud investigation, that is generally a sign that it intends to pursue civil or criminal charges, including fines and/or imprisonment.

How Can Providers Appeal Their Medicare Fraud Charges?

For Original Medicare claims, there are five appeal levels culminating in federal district court, and the process begins with an initial claim determination rather than with criminal charges. Providers must file their appeals on time, and providers’ appeals must be structured properly in order to advance in the Medicare appeal process.

Does the Provider Need a Lawyer for the Medicare Appeal Process?

The Medicare appeal process is complex, and providers will often make mistakes when appealing their Medicare fraud charges. It is important that providers work with an experienced Medicare fraud defense attorney who can provide legal representation and help providers make informed decisions throughout the Medicare appeal process.

Which Federal Demand Is the Provider Facing?

As noted, there are four types of federal demands that a healthcare provider may be facing:

• False Claims Act Demand
• Federal Grand-Jury Subpoena
• Federal Search Warrant
• Federal Grand-Jury Investigation

Each of these demands permits investigators to take certain actions. Some of these actions will be civil in nature, while others will be criminal in nature. Providers will want to work with an experienced healthcare provider fraud defense lawyer to help them understand their rights and obligations in order to make informed decisions about the best course of action.

What Is a False Claims Act Civil Investigative Demand (CID)?

A False Claims Act Civil Investigative Demand (CID) is a federal demand issued under the False Claims Act that allows the government to gather information from healthcare providers that the government believes may have filed false claims with a federal healthcare program. A False Claims Act CID allows investigators to demand production of records, compel testimony from providers, and demand additional information.

A False Claims Act CID is a civil tool. While a False Claims Act CID can be used to investigate Medicare, Medicaid, and Tricare fraud, investigators can use the information they obtain to refer the case for criminal prosecution. Thus, providers should expect a False Claims Act CID to be civil in nature, but they should prepare for the possibility of criminal prosecution as well.

What Is a Federal Grand-Jury Subpoena?

A federal grand-jury subpoena is a demand issued by a federal grand jury that allows federal prosecutors to obtain information from providers regarding potential criminal conduct. A federal grand-jury subpoena may be issued to compel the production of documents or to compel testimony from a healthcare provider. If a healthcare provider is served with a federal grand-jury subpoena, it is critical that the provider contact a healthcare provider fraud defense lawyer immediately.

What Is a Federal Search Warrant?

A federal search warrant is a demand issued by a federal judge that allows federal agents to search and seize evidence from a healthcare provider in order to facilitate a criminal healthcare-fraud investigation. To issue a federal search warrant, the government must demonstrate probable cause that the evidence it wants to seize is located at the specified location.

“I am a straight shooter,” Todd Spodek says of his own practice. “I tell clients exactly where their case stands.”

Which Legal Theories Can Turn Questionable Billing into Federal Healthcare Fraud?

Several different legal theories can turn questionable billing into allegations of federal healthcare fraud. With regard to Medicare fraud, there are three primary theories:

1. False Statements and Fraudulent Claims under the Federal Healthcare Fraud Statute (18 U.S.C. Section 1347)

The Federal Healthcare Fraud Statute (18 U.S.C. Section 1347) has two substantive provisions. The first provision allows for criminal prosecution if a provider:

• “knowingly and willfully executes, or attempts to execute, a scheme or artifice
• (1) to defraud any health care benefit program; or
• (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program;”

A provider can face federal criminal prosecution under the Federal Healthcare Fraud Statute regardless of whether the provider executed their billing scheme successfully. If the provider’s conduct does not rise to the level of a federal crime, the federal government can still pursue civil enforcement action for False Claims Act violations under 31 U.S.C. 3729. A False Claims Act case has its own elements and scienter standard and does not require the same factual evidence as a criminal case under 18 U.S.C. § 1347. For example, the government will need to show that:

• (i) the provider’s conduct met the FCA’s “knowing” standard, meaning actual knowledge, deliberate ignorance of the truth or falsity, or reckless disregard of the truth or falsity; the FCA does not require proof that the provider acted willfully.
• (ii) the provider’s conduct did not just violate a Medicare billing regulation, but rather it “constitutes a crime.” If the provider merely made a mistake, this does not rise to the level of a fraud investigation.
• (iii) the government’s evidence was collected in accordance with applicable constitutional rights.

2. Kickbacks, Bribes, and Referrals under the Anti-Kickback Statute

The Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)) is another federal anti-fraud statute. A provider can face civil and criminal liability under the Anti-Kickback Statute if the provider:

• “knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind”
• in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program; or
• (ii) in return for business generating revenue or for services rendered in connection with the delivery of items or services for which payment may be made in whole or in part under a federal healthcare benefit program.”

3. Physician Referrals under the Stark Law

The Stark Law (42 U.S.C. Section 1395nn) addresses physician referrals for “designated health services” payable by Medicare.

Why Can a Single Investigation Produce FCA Damages, Exclusion, and Professional Discipline?

The reason why a single investigation can produce FCA damages, exclusion, and professional discipline is that federal healthcare fraud cases often present a factual record that can support multiple theories of liability. If you are a healthcare provider being investigated for healthcare fraud, this means you should make a conscious effort to coordinate your defense. You will want to work with a healthcare provider fraud defense lawyer who can advise you about your options going forward.

What Is the False Claims Act (FCA)?

The False Claims Act (FCA) is codified principally at 31 U.S.C. §§ 3729-3733, and it has been amended numerous times throughout the years. It contains several different provisions relating to civil enforcement, and it has both “qui tam” and “whistleblower” provisions. The FCA is applicable in healthcare-fraud cases involving Medicare, Medicaid, Tricare, or any other program that is funded by a federal healthcare benefit program. Under the FCA, a provider can face civil liability if it presents a claim to Medicare (or another program) for payment of “money or property” that contains:

• (i) a false or fraudulent claim for payment or approval
• (ii) a false record, or a claim for payment that is falsely certified; or
• (iii) a false record or statement material to a false or fraudulent claim.

If you are subject to an FCA investigation, your defense attorney needs to work closely with the government in order to ensure that your case is not referred to the U.S. Department of Justice (US DOJ) for prosecution under the False Claims Act.

What Does it Mean to Establish “Scienter” Under the False Claims Act?

In order to prove a violation of the False Claims Act, the federal government will need to establish “scienter.” Scienter is a legal term that, in the context of the False Claims Act, includes:

• actual knowledge;
• deliberate ignorance of truth or falsity; or
• reckless disregard of truth or falsity.

Does a Provider Need Specific Intent to Defraud Under the False Claims Act?

No. A violation of the False Claims Act does not require specific intent to defraud.

Can a Healthcare Provider be Liable for Treble Damages Under the False Claims Act?

Yes. If a violation of the False Claims Act is found to cause qualifying government losses, treble damages are typically imposed.

What Are Some of the Remedies for Anti-Kickback Violations?

Remedies for Anti-Kickback violations can vary depending on the type of violation. Some may result in professional sanctions such as license suspension or professional discipline, others may result in civil remedies such as fines, and others may result in felony charges. In addition, some healthcare-fraud investigations can lead to exclusion from the federal program in which the fraudulent billing was allegedly made.

Can a Healthcare-Fraud Investigation End with a Criminal, Civil, or Administrative Proceeding?

Yes. A healthcare-fraud investigation can end with a criminal, civil, or administrative proceeding.

Calling About Someone You Love

Most first calls to a defense firm come from a family member rather than the person under investigation. If that is you, Spodek Law Group answers its phone at any hour, and families retain the firm on a relative's behalf every week. Reach it at 888 348 8028.