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 Healthcare Fraud Case: What To Expect 

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Michael Santos

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WHAT TO EXPECT IN A HEALTHCARE FRAUD CASE

A healthcare fraud case can be overwhelming, whether the person is a whistleblower, an informant, a witness, a suspect, or a target.

INTRODUCTION

Anyone with reason to suspect that they could be involved as a witness, suspect, or target in a healthcare fraud investigation or prosecution, read on. This blog post is for you. 

A federal healthcare fraud case can be overwhelming, whether someone is involved as a whistleblower, an informant, a witness, a suspect, or a target. The more information people have about what to expect, the better. 

Below, we discuss what people can expect in a federal healthcare fraud case and answer some frequently asked questions about healthcare fraud.

This blog post is part of our current series focusing on federal healthcare fraud. Prior blogs can be found HERE and HERE.

DISCUSSION

No one should take a potential healthcare fraud investigation lightly. For one, the personal and professional stakes are very high for anyone embroiled in any such investigation, given how healthcare fraud is punished so severely in our criminal justice system. 

How is Healthcare Fraud Punished?

Healthcare fraud is punished with fines and imprisonment up to 10 years. Moreover, when healthcare fraud results in serious injury, healthcare fraud is punished even more harshly, and a prison sentence could increase up to 20 years. 

Healthcare fraud punishment and penalties can be devastating. Federal healthcare fraud charges are serious and lead to a lengthy prison sentence. Making any false statement concerning a Medicaid or Medicare claim alone, for example, can result in a prison sentence of 5 years for each offense. Lying and overbilling Medicare and Medicaid are some of the major types of healthcare fraud and abuse. As noted above, a conviction for federal healthcare fraud can result in a 10-year sentence for each offense. Simply stated, healthcare fraud is punished severely.

How is Healthcare Fraud Detected?

Law enforcement investigators detect healthcare fraud through audits and with the help of informants and whistleblowers. Careful account audits can reveal suspicious providers and patients. Random audits help detect healthcare fraud, as auditing all claims is not practical or generally feasible.

The Federal Bureau of Investigations (FBI) is the primary agency investigating and detecting healthcare fraud occurring in federal and private insurance programs. The FBI investigates healthcare fraud crimes in partnership with federal, state, and local agencies. 

The Department of Health and Human Services Office of Inspector General (HHS-OIG) also shares responsibility for investigating and detecting healthcare fraud, especially as it relates to federal programs like Medicaid and Medicare. Defrauding federal programs like Medicaid and Medicare is a major type of healthcare fraud and abuse.

In many healthcare fraud investigations, there are generally informants, people who have reason to inform the federal government about healthcare fraud schemes. Sometimes, not always, they are acting as whistleblowers. 

Whistleblowers are generally people inside an operation who know or suspect that wrongdoing and fraudulent conduct are happening. They do not want to get hemmed up by it and also want it to stop. As such, whistleblowers will confidentially provide information to the federal government, launching an investigation. 

The government offers whistleblower rewards, and the FBI has tip lines available to anyone wishing to report healthcare fraud and abuse. A typical FBI plea to consumers asks:

“Report Health Care Fraud 

We need your help to identify, investigate, and prosecute this crime. If you suspect health care fraud, report it to the FBI at tips.fbi.gov, or contact your health insurance provider.”

Common Types of Healthcare Fraud

Fraud Committed by Medical Providers

  • Double billing: Submitting multiple claims for the same service
  • Phantom billing: Billing for a service visit or supplies the patient never received
  • Unbundling: Submitting multiple bills for the same service
  • Upcoding: Billing for a more expensive service than the patient actually received

Fraud Committed by Patients and Other Individuals

  • Bogus marketing: Convincing people to provide their health insurance identification number and other personal information to bill for non-rendered services, steal their identity, or enroll them in a fake benefit plan
  • Identity theft/identity swapping: Using another person’s health insurance or allowing another person to use your insurance
  • Impersonating a healthcare professional: Providing or billing for health services or equipment without a license

Fraud Involving Prescriptions

  • Forgery: Creating or using forged prescriptions
  • Diversion: Diverting legal prescriptions for illegal uses, such as selling your prescription medication
  • Doctor shopping: Visiting multiple providers to get prescriptions for controlled substances or getting prescriptions from medical offices that engage in unethical practices

SOURCE: fbi.gov

Notice Of Healthcare Fraud Investigation Or Target Letters

A federal healthcare fraud case can be overwhelming for anyone, whether a whistleblower, an informant, a witness, a suspect, or a target. 

Pro-Tip: Anyone involved in a healthcare fraud case should consult experienced legal counsel. Prison Professors and White Collar Advice, Earning Freedom companies, regularly assist clients in locating and vetting experienced healthcare fraud defense lawyers.

When there is a healthcare fraud investigation, sometimes people receive a notice of investigation. Other times, when they are suspected of wrongdoing, a person may receive a target letter from federal prosecutors informing them that they are the subject, or target, of an investigation. 

FOR MORE ON TARGET LETTERS, CLICK HERE.

A target letter will generally state that a grand jury investigation is underway and advise the person of specific rights. A target letter is a typical way to learn they are under federal investigation for healthcare fraud.

A person who receives a target letter would be well advised to consult an experienced healthcare fraud lawyer. Among other things, a target can expect to be arrested and processed when prosecutors are ready to do so. 

In non-violent, white-collar crime cases such as healthcare fraud, federal magistrates and judges will typically release a defendant pending trial with certain conditions. Factors that play into release conditions include the amount of the fraud, criminal history, identity of the alleged victims, community ties, and risk of flight. The court will consider the entirety of the circumstances and listen to defense counsel and prosecutors to determine pre-trial release conditions. 

In the absence of a target letter, people find out about a healthcare fraud investigation involving them only when the government investigators show up with a search warrant to seize their computers, cell phones, mobile ipads, and laptops. 

Target of A Healthcare Fraud Investigation: What Now?

The target of a healthcare fraud investigation must proceed with care and avoid making common mistakes. 

One of the most common mistakes someone charged with healthcare fraud — or any other type of fraud for that matter — can make is believing that they can talk their way out with a federal law enforcement agent. This is not at all the case. 

When agents come to a person’s home or business to execute a search warrant, part of the unstated objective is to catch the person disoriented and afraid. That is when some law enforcement agents attempt to get them to consent in writing to an interview on the spot. The best advice for people when law enforcement agents visit is to comply with the law and not volunteer any information. 

In such situations like the middle of a visit from law enforcement, it is foolish to assume that as long as a person is truthful, they can make the law enforcement agents understand and the problem will disappear. That is not how it works. Instead, law enforcement agents are hoping for a confession or incriminating statements. Some agents try to twist people’s words, so remaining silent is the best thing to do. If possible, people should call a lawyer. Nothing more. Again, people believing they have nothing to hide sometimes start disclosing information without fully appreciating the potential pitfalls and this is always a mistake.  

A Healthcare Fraud Trial

Healthcare fraud is a federal felony for which the penalties are among the harshest. Most cases get resolved via plea deals, and trials are rare. 

Negotiating a plea deal allows avoiding the uncertainty of trial. Deciding whether to accept a specific plea deal requires a clear understanding of the relevant facts and the relevant law applicable to federal healthcare fraud cases. Under appropriate circumstances, negotiating a plea deal can render the most favorable outcome to a person’s criminal healthcare fraud case. 

Recently, two medical doctors involved in a Medicare fraud scheme received prison sentences of 23 years combined after a jury convicted them at trial for healthcare fraud. Some judges are particularly sensitive to healthcare fraud schemes against Medicaid and Medicare, which are one of the major types of major types of healthcare fraud and abuse

Both doctors helped a local hospice agency defraud Medicare, and a federal jury found them guilty of conspiracy to commit healthcare fraud and other charges. Defendant Dr. Gibbs received a 13-year prison sentence and a $28 million restitution order. Defendant Dr. Hirjee received a 10-year prison sentence and a $16 million restitution order. A third defendant involved in the scheme received a sentence of 33 months in federal prison. 

According to witnesses and other evidence presented at trial, the defendants conspired to defraud Medicare by illegally admitting patients into hospice care who were not appropriate for hospice and submitting false Medicare claims for hospice services. This case involving a hospice service facility is an example of healthcare provider fraud.

Significantly, the CEO of the hospice facility that employed Drs. Gibbs and Hirjee pleaded guilty before the trial and testified against them. The CEO admitted to the jury that instead of relying on the expertise of licensed medical professionals, he determined which patients would be admitted to or discharged from hospice care and which drugs and dosages they would receive. He employed nurses who helped him.

The CEO and his colleagues relied upon doctors such as Dr. Gibbs and Dr. Hirjee to falsely certify that they had examined the patients in person so that Medicare would provide reimbursements. Making false statements such as these to Medicare is one of the most common Medicare frauds. Billing for services not performed is also one of the most common Medicare frauds.

Additional evidence at the trial showed that Drs. Gibbs and Hirjee prescribed Schedule II controlled substances, such as morphine, hydromorphone, and fentanyl, by pre-signing blank prescriptions and allowed unqualified people to use them to prescribe controlled substances without any medical oversight.

CEO Harris and the nursing team used pre-signed prescription pads, prepared by Dr. Gibbs, Dr. Hirjee, and other doctors, to dispense medications like morphine to patients. When Medicare suspended payment to the hospice provider over billing concerns, the defendants and others moved patients and employees to a new hospice company so they could continue to bill Medicare for hospice services.

All told, Medicare and Medicaid paid out approximately $40 million for hospice services before shutting down the operation.

After the sentencing of Drs. Gibbs and Hirjee, a representative from the US Attorney’s Office, noted how the two defendant doctors “allowed…an accountant with no medical expertise – to dispense controlled substances like candy, with little to no medical oversight.” The US Attorney’s Office also added that the doctors falsely “claimed to have had hands-on experience with hospice patients, when in fact, they’d entrusted life-or-death medical decisions to untrained businesspeople. We are satisfied to know they will spend the next decade behind bars.”

“The defendants violated their Hippocratic Oath as doctors and instead focused on lining their pockets at the expense of patient safety. This case highlights the importance of thoroughly investigating any complaint of healthcare fraud,” said an FBI Dallas Special Agent in Charge. 

“We encourage the public to help us identify, investigate, and prosecute this crime. If you suspect health care fraud, report it to the FBI at tips.fbi.gov, 1-800-CALL-FBI, or contact your health insurance provider.”

In this case, the agencies that conducted the investigations were the Federal Bureau of Investigation’s Dalla s Field Office, the US Department of Health & Human Services Office of Inspector General (HHS-OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit. This inter-agency cooperation is typical in healthcare fraud matters.  

Key Takeaways 

  • The federal government has robust tools and resources to investigate and prosecute healthcare fraud cases. No one in the healthcare industry should take the government’s focus on healthcare fraud lightly. 
  • Medical professionals must keep abreast of law enforcement trends and tactics.
  • The federal government believes strongly in the deterrent effect of criminal prosecutions and will take cases to trial if needed.
  • Healthcare industry professionals must be proactive and seek help if they suspect any potential wrongdoing.  
  • Billing unnecessary medical services and prescription drug abuses are at the forefront of law enforcement concerns. These are major types of healthcare fraud and abuse. Many people are serving lengthy prison sentences for billing unnecessary services to government healthcare programs like Medicaid and Medicare, and more investigations and prosecutions are in the pipeline.

*Pro-Tip: Remember to consult criminal defense counsel for legal advice regarding any court case or investigation.

Prison Professors, an Earning Freedom company, works alongside (not in place of) criminal defense attorneys to help clients proactively navigate through white-collar cases and prosecutions. It’s our experience that more well-informed and proactive clients obtain better outcomes.

CONCLUSION

A federal healthcare fraud case can be overwhelming, whether someone is involved as a whistleblower, an informant, a witness, a suspect, or a target. The more information people have about what to expect, the better. 

The federal government has the resources to aggressively investigate and prosecute healthcare fraud cases. No one in the healthcare industry should take the government’s focus on healthcare fraud lightly, as federal law enforcement strongly believes in the deterrent effect of criminal prosecutions. People in the healthcare industry must be proactive and seek help if they suspect any potential wrongdoing or are suspected of wrongdoing.  

Prison Professors, an Earning Freedom company, works alongside (not in place of) civil and criminal defense counsel to help clients proactively navigate through investigations and prosecutions. Our team also helps clients prepare mitigation and compliance strategies.

If you have any questions or are uncertain about any of the issues discussed in this post, schedule a call with our risk mitigation team to receive additional guidance. 

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