Anticipating a New Era of Healthcare Enforcement


Regardless of political persuasion, few would argue with the notion that the first five months of the Trump administration have been a turbulent ride, thrusting front and center a range of hot button issues. In the midst of racheted rhetoric from both sides on subjects as diverse as the Travel Ban, James Comey's termination and the continuing viability of the Affordable Care Act, the words commonly attributed to Mark Twain offer some insight to those who represent providers and seek to read the tea leaves regarding a more narrow and less prominent issue: the future of healthcare enforcement actions. To be sure, only time will tell with certainty. But an understanding of past enlightens efforts to predict the future, and teaches us that while we should expect a some shifting of priorities and perhaps a refocusing of resources, wholesale changes in the way the Department of Justice identifies, investigates and resolves healthcare enforcement actions are not coming any time soon, if they come at all.

Healthcare enforcement actions come in two basic types: criminal prosecutions, which seek to impose criminal penalties (including jail time, fines and forfeiture of assets) and civil actions, which seek to collect monetary damages (often in multiples) based on the submission of false claims). The standard for determining which type of case the government should bring in a given situation is not always clear, but some general principles apply. First, the government evaluates the nature of the conduct in question, measuring its dimensions by looking at factors such as the amount of financial loss caused to the victim (either government payor, private insurer or individual patient), the amount of financial gain realized by the provider, the number of violations, the nature of the violations (including whether patient harm resulted) and, particularly in case of allegations involving providers other than individuals, the geographic scope of violations, efforts to conceal them and whether the conduct was self disclosed. The spectrum for assessing conduct runs from "isolated" to "systemic." The closer to the latter the case falls, the more likely the government will move forward in some fashion.

Once those dimensions are calibrated, the government then looks at the environment where the violations occurred. Here, the goal is to examine the compliance efforts undertaken before the violations occurred. Most often, this is a central component of assessing allegations against corporations, but can also be considered where individuals are targeted. Here, the government seeks to determine what measures, if any, were installed before the fact to ensure that only appropriate claims were submitted. The spectrum for measuring a compliance environment runs from "robust" to "non-existent" and, once again, an enforcement action is more likely the further the latter that assessment falls.

Under this framework, flagrant examples of healthcare fraud - including charges for fake patients, services never performed, and obvious DME fraud - will continue to be recognized as necessitating enforcement actions, most often in the form of a criminal prosecution. Closer to the margin, however, are those cases where wrongdoing is less clear: those that turn on questions regarding diagnoses and disputes over the medical necessity of a particular form of treatment. It is these more nuanced questions where a change in administrations can affect priorities, and result in a shifting of resource allocation.

There are a number of reasons that whole changes in healthcare enforcement priorities are unlikely, some more obvious than others. Contrary to popular belief, the Justice Department is simply too big, and the cases it typically handles too complex, to allow for radical and rapid changes in priorities. The typical duration of civil enforcement actions and even criminal prosecutions is typically months, if not years, and deciding to change course on a dime means abandoning hundreds of thousands of dollars (if not more) and large volumes of man hours to pursue newly designated priorities. That type of event almost never happens, even when administrations change, because the dedication of resources necessary to get these investigations moving to the point of momentum means they do not stop quickly, except in the most unusual of circumstances. The government's substantial return on investment in healthcare enforcement a cases - typically measured at 10-20 times - further diminishes the likelihood that enforcement cases are going to be reduced, must less eliminated.

More gradual change is easier, and thus more likely. While the enforcement actions of tomorrow will look slightly different - a greater focus on pain management cases, particularly those with an opioid component - they will, at their core, rhyme with their predecessors.

William Athanas is a partner with Waller Law.


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