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Criminal and Civil Enforcement Trends to look out for in the Healthcare Industry

Civil and criminal Enforcement trends in Healthcare

The year 2017 was an eventful one for healthcare law with a number of criminal and civil enforcement proceedings filed against small healthcare practices and individual healthcare providers. The rising trend in the number of cases against individuals can be attributed to an increased patronage for data analytics and the newfound awareness towards the opioid crisis.

As expected, the uncertainty around the Affordable Healthcare Act was hard on healthcare (insurance) providers and payers. But despite this, one thing remained immune to all factors and administrative transitions, rooting out healthcare fraud. “The government’s focus, along with the increasing willingness of the relators’ bar to pursue False Claims Act (“FCA”) cases when the government declines to intervene, has placed (and will continue to place well into the future) every individual and entity participating in the health-care sector in the crosshairs of those who proclaim to combat health-care fraud,” reported Bloomberg BNA Health Law Reporter.  The result- healthcare fraud recoveries are estimated to touch staggering values by the end of 2018.

To get a perspective of what numbers to expect, the year 2017 ended with more than $3.7 billion collected by the Department of Justice in various civil cases of which $2.4 billion was for fraudulent and false claims against the healthcare industry. This was inclusive of all major operators, i.e. drug companies, healthcare providers, big pharma, labs, and physicians. Another 545 new cases involving healthcare fraud was still pending with the DOJ when this report was released. Though each case is unique, the reactions and settlements they evoked demonstrate a new direction for healthcare law and trends in Criminal and civil enforcement to look out for in coming years.


Criminal and civil enforcement against individuals

Criminal prosecution of individuals for healthcare law violations saw an equal increase in the number of settlements. Following the Yates memo, which set the guidelines for any cooperation points a company can get for providing relevant information on individuals charged with misconduct, new criminal, and civil resolutions are forcing continued cooperation by companies.

Governments will try to advertise on the positive results of companies disclosing evidence of misconduct in the earliest possible way. “We have yet to identify a case that clearly illustrates the benefits afforded to a compliant company, likely because companies benefitting from the Yates Memo’s provisions strive to keep the specifics of the wrongdoing confidential.  Notwithstanding, the government may move toward providing more concrete guidance as to the benefits of disclosure and certainty to companies that must make time-sensitive decisions,” writes Eoin Beirne

Civil Settlements Involving Individuals also got a boost in the year 2017 according to the “year-end report on recoveries under the False Claims Act (FCA)” released by the DOJ.  The report discusses several cases in detail with doctors, administrators and other staff being the primary focus. They have been classified under: 1. agreed to be a part of institutions settling FCA cases, or 2. independently settling FCA cases.  In plain numbers, the DOJ claims to have charged companies, coming under the second category, more than $60 million in liability.



Enforcement to combat opioid abuse

The American government declared the opioid crisis “a public health emergency,” infusing more than a billion dollars into public run anti-opioid efforts. Attorney General Jeff Sessions was quoted saying “we are facing the deadliest drug crisis in American history. Based on preliminary data, at least 64,000 Americans lost their lives to drug overdoses last year. This crisis is driven primarily by opioids . . . .”

At the end of last year, the Department of Justice masterminded the setting up of “Opioid Fraud and Abuse Detection Unit.” Its primary goal- “to focus specifically on opioid-related health-care fraud using data to identify and prosecute individuals that are contributing to this prescription opioid epidemic.”

Following the formation of this task force, there has been an increase in the number of convictions involving opioid-related frauds. While limited in scope, for now, such task forces are expected to widen their “search parameters”, so to speak. “While physicians, in particular, have been the subject of recent actions, these convictions should serve as a warning to the sector, and we expect future investigations to include all types of individuals and entities involved in the opioid manufacturing and distribution chain,” wrote George Breen of Bloomberg BNA Health Law Reporter.


Enforcements to prevent Electronic Health Record (EHR) frauds

Healthcare organizations world over were encouraged to adopt electronic storage of patient health records and medical histories so as to assist future automated systems and faster medical data access. Incentives were offered under various programs, such as the “EHR Incentive Program” by the “The American Recovery and Reinvestment Act of 2009,” to stress the adoption of certified EHR tech and principles.

In 2017 alone, there were quite a few reports of “false certifications” made under the EHR incentive program. In this digital World of data-driven healthcare solutions, we expect healthcare laws pertaining to EHR to become more smart and comprehensive.


Home care and hospice industries on the hot seat

While strong handing frauds in post-acute care have been a great success for the federal government in the last few years, 2017 saw a significant rise in the number of settlements. The most famous one being the settlement of $75 million to resolve false claims allegations by Chemed corp, one of the largest hospice chains in the country.

But whether such settlements will continue remains unclear after some law advisories held that “Claims are not “false” under the FCA when the alleged falsity is based on a retrospective difference of clinical opinion about the medical necessity of the services at issue.”

The healthcare law trends of the past year alone should give individuals a perspective of what to expect as retribution for healthcare fraud. The government has huge resources at its disposal and the revenue generated by settlements give enough reasons for continued vigorous Criminal and Civil Enforcement.


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