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Strong Compliance Programs Key to Avoiding Healthcare Fraud

The type of compliance program a provider implements could be the difference between a criminal and civil healthcare fraud case.

By Jacqueline Belliveau

- Preventing and catching healthcare fraud schemes has recently jumped to the forefront of many public and private payer programs that are designed to reduce unnecessary healthcare spending.

Developing comphrensive compliance programs are key to avoiding healthcare fraud

The Department of Health and Human Services (HHS) announced recently that it facilitated the largest healthcare fraud takedown in the federal agency's history. HHS, in collaboration with the Department of Justice (DOJ), identified 301 individuals that were involved in false medical billing incidents, totaling $900 million.

The news marked a shift in the federal government's approach to healthcare fraud. Secretary Burwell emphasized that the healthcare fraud takedown symbolized a commitment to cracking down on providers that try to defraud Medicare and its new proactive strategy for preventing healthcare fraud.

As part of its anti-fraud efforts, many healthcare organizations have become subject to investigations for alleged healthcare fraud incidents. While prosecutors try to reveal what happened and how much it cost public payers, the government has also tried to use the investigations to understand why healthcare fraud happens and how it can help organizations to prevent it.

Gejaa Gobena, former Chief of the Healthcare Fraud Unit in the Department of Justice Criminal Division, told RevCycleIntelligence.com how government prosecutors assess reported healthcare fraud schemes and what prosecutors focus on during their evaluations and resolutions.

READ MORE: DOJ Charges 3 Individuals in $1B Medicare Fraud Scheme

When it comes time to investigating a healthcare fraud case, prosecutors not only examine the alleged fraud scheme, but they also explore why the event occurred, according to present-day partner at Hogan Lovells. A major aspect of a prosecutor’s job is to understand why a company’s compliance program did not prevent the potential healthcare fraud incident.

“As you're gathering the facts and starting to engage the company on a corporate healthcare investigation, one of the things you'll be looking at what kinds of compliance measures were in place, why they didn't stop the conduct, and why did that happen,” Gobena explained. “To get a little bit deeper, you're going to take a look at the compliance program and see how was it designed, how was it structured, and was it what they call a paper compliance program or a real compliance program.”

Healthcare prosecutors generally have to decide if the organization in question implemented a legitimate compliance program. During the evaluation, prosecutors try to pinpoint if the entity is merely checking off requirements on a compliance checklist or creating a system that monitors and prevents potential instances of healthcare fraud.

“The distinction that prosecutors make is if there is a paper compliance program, which means there is not much in the way of empowerment for the compliance official or not much in the way of verifying business practices,” Gobena said.

In contrast, he explained that legitimate compliance programs have “a compliance officer or a compliance official who's really empowered to make sure the company acts in a legal and ethical way and ensures that business decisions won't always trump proper legal practices.”

READ MORE: Former Hospital Exec Pays $1M to Settle Medicare Fraud Case

“Real compliance programs that have real teeth to them can be circumvented if there are people who are going to act unscrupulously,” Gobena added. “But if it looks like the company is trying with a real compliance program, that'll certainly factor into whether a prosecutor decides if criminal or civil charges are more appropriate.”

Determining if a company developed a robust system for preventing or catching potential healthcare fraud can influence a prosecutor’s assessment and, ultimately, the outcome of the case.

“As the government evaluates whether or not to charge the company it's going to look at that and consider it in connection with several other factors to determine whether to launch a criminal charge against the company,” he said.

As part of the decision-making process, healthcare prosecutors look for “guilt factors,” which is a colloquial term for determinants in the federal attorney’s manual that influence the prosecutor’s evaluation.

“There are nine or ten of them in the US attorney's manual, and they're meant to guide prosecutors on whether to charge a corporation based on a variety of factors,” Gobena said. “Compliance efforts and remediation are two of those factors. I think one of the things that we've seen in recent years is that they are becoming increasingly important factors that prosecutors will weigh as they're making their charging decision.”

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

The type of compliance program also plays a part in how the government chooses to resolve a healthcare fraud case, Gobena stated. The government must decide if it will pursue a case against the company and if it will require the organization to implement monitors to prevent potential healthcare fraud incidents.

If prosecutors determine that a healthcare organization maintained a legitimate compliance program, the government may reconsider its approach to prosecution and prevention strategies. In many cases the resolution is not as severe or costly for providers.

“If a company has a really robust compliance program, it may affect whether or not it's required to have a monitor later on in the event there is a resolution,” he added.

“For example, company A is being investigated for healthcare fraud. Ultimately, the company and the government come to an agreement that there should be a non-prosecution agreement. Well, oftentimes with non-prosecution agreements, there's a requirement to have a monitor in place to make sure that the company is acting lawfully going forward, at least for a short period of time, such as 18 months, two years, or three years.”

“If the company has developed a robust compliance program, after the allegations first came to light, the government may consider that and say, ‘You know what? This compliance program is pretty robust. We don't think that a monitor will necessarily add too much.’ The company's compliance program could take the place of a monitor in connection with that resolution.”

While non-prosecution agreements are fairly uncommon, DOJ has recently emphasized the importance of determining what kind of compliance program was in place and how it should factor into the healthcare fraud resolution.

“In fact, DOJ has hired a corporate compliance counsel, and one of her jobs is to evaluate the existing compliance program to see whether or not that's a possibility in connection with the resolution,” Gobena noted.

To protect a healthcare organization before and during a healthcare fraud investigation, the entity should regularly evaluate the effectiveness of their compliance programs. Healthcare organizations should ensure that their compliance professionals are always questioning if a request or action is legally appropriate, Gobena recommended.

Maintaining a more proactive approach to preventing healthcare fraud may also benefit providers, not just payers.

“Where I've seen companies get into trouble is if that reporting takes place and nothing else is done afterwards,” he said. “So asking questions, finding out the details of proposed business practices, showing that they are taking their jobs seriously, and that they really want to make sure that the company is operating as legally and ethically as possible. Being proactive is only going to be considered a positive from the government's perspective.”

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