DOJ focus is on ‘egregious’ and ‘despicable’ health care fraud

In a speech on May 18, 2017, at the American Bar Association’s 27th Annual Institute on Health Care Fraud, Acting Assistant Attorney General Kenneth A. Blanco stressed that the Department of Justice (DOJ) would continue with keeping health care fraud a priority. The amount of loss to the American tax payer per year due to healthcare fraud is in the billions, with some estimates putting the number close to $100 billion per year.

Blanco stressed the importance of cooperation between the Medicare Strike Force, the U.S. Attorney’s Offices, and federal and state investigative agencies. He noted that the DOJ was employing an in-house data analytics team to review CMS billing data in order to focus on the most aggravated cases quickly. In turn this data is pushed to other federal and state investigative agencies.

Detailing examples of recent work by the Health Care Fraud Unit, Blanco highlighted that October 2016, Tenet Healthcare Corporation, a publicly-traded company and the third largest hospital chain in the United States, entered into a global resolution with the government, agreeing to resolve an investigation of a corporate bribery and fraud scheme at four Tenet-owned hospitals in Georgia and South Carolina. As part of that scheme, the hospitals paid over $12 million in bribes to a chain of prenatal care clinics in exchange for the referral of Medicaid patients.

Under the global resolution: (1) two Tenet subsidiaries pleaded guilty to conspiracy to defraud the United States and pay kickbacks and bribes in violation of the Anti-Kickback Statute, and forfeited over $146 million in Medicare and Medicaid funds; (2) Tenet entered into a non-prosecution agreement requiring, among other things, an independent compliance monitor for a period of three years over all entities owned, in whole or in part by Tenet; and (3) Tenet and its subsidiaries entered into a civil settlement agreement and paid $368 million to the United States, the State of Georgia and the State of South Carolina (see Corporations, beware: Tenet Healthcare to pay $513M to settle kickback charges, Health Law Daily, October 4, 2016). Subsequently two individuals have pleaded guilty and a former senior executive of Tenet was indicted for the scheme (see DOJ comes for executive in Tenet fraud case, Health Law Daily, February 2, 2017).

CMS has estimated that the total health care spending in the United States in 2015 reached $3.2 trillion, or 17.8 percent of the gross domestic product. As such, the DOJ considered health care fraud as “egregious,” and from Blanco’s viewpoint, “despicable,” because it resulted in depriving medical care for those in actual need. Blanco noted that health care fraud impacts the public’s access to medical care, even the most basic forms, because fraud increases the costs for all.