Kusserow on Compliance: DOJ announced largest health care fraud case in its history

The Department of Justice (DOJ) announced a joint investigation involving the HHS OIG, FBI, and DEA which resulted in a historic nationwide enforcement action involving 345 charged defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals, who submitted more than $6 billion in false and fraudulent claims to federal health care programs and private insurers.

The largest amount of alleged fraud loss charged was $4.5 billion in claims submitted by more than 86 criminal defendants in 19 judicial districts related to schemes involving telemedicine. Telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment (DME), genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. DME companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers.

In the “sober homes” cases, there were a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for patients seeking treatment for drug and/or alcohol addiction. Defendants included physicians, owners and operators of substance abuse treatment facilities, as well as patient recruiters, who allegedly participated in schemes involving the payment of illegal kickbacks and bribes for the referral of scores of patients to substance abuse treatment facilities who were subjected to medically unnecessary drug testing and therapy sessions that were frequently not provided. The patients were then often discharged and admitted to other treatment facilities, or referred to other laboratories and clinics, in exchange for more kickbacks.

Other cases involved illegal prescription and/or distribution of opioids and other frauds involving more than 240 defendants allegedly participating in schemes to submit more than $800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries, and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Also included were charges against medical professionals and others involved in the distribution of more than 30 million doses of opioids and other prescription narcotics.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Webinar: Regulatory Pitfalls & Business Opportunities in Behavioral Health

Recent rapid growth in the behavioral health industry has been driven by national awareness of the opioid crisis, including the Support for Patients and Communities Act.

Join Alicia Macklin and Robert Miller from Hooper, Lundy & Bookman as they discuss the expansion potential in behavioral health as well as the unique licensing, regulatory, and compliance concerns in this space. Get practical tips for both day-to-day operations and due diligence for mergers/acquisitions.

Register here for the educational webinar taking place March 18, 2020 at 1:00 PM ET.

Kusserow on Compliance: OIG Civil Monetary Penalties Law enforcement actions for the second half of 2019

Many remain unaware of the Civil Monetary Penalties Law (CMPL). It comes into action when the DOJ believes false claim cases don’t rise to a level sufficient for prosecution in the courts. The OIG is authorized under the CMPL to impose administrative penalties, assessments, and exclusions against a person who, among other things, submits, or causes to be submitted, claims to a federal health care program that the person knows, or should know, are false or fraudulent. The exclusions statute also authorizes OIG to exclude a person who violates the CMPL. Those who appeal the OIG imposed penalties can appeal to an HHS Administrative Law Judge (ALJ). It is rare that an ALJ has overturned the OIG. During this semiannual reporting period, the OIG concluded cases involving more than $30 million in CMPs and assessments.

THE CMPL can be thought of as the administrative version of the False Claims Act. This means that any person who submits, or causes to be submitted, to a federal health care program a claim for items and services that the person knows, or should know, is false or fraudulent is subject to a penalty of up to $15,270 for each item or service falsely or fraudulently claimed, an assessment of up to three times the amount falsely or fraudulently claimed, and exclusion.

For the purposes of the CMPL, “should know” is defined to mean that the person acted in reckless disregard or deliberate ignorance of the truth or falsity of the claim. The law and its implementing regulations also authorize actions for a variety of other violations, including submission of claims for items or services furnished by an excluded person; requests for payment in violation of an assignment agreement; violations of rules regarding the possession, use, and transfer of biological agents and toxins; and payment or receipt of remuneration in violation of the anti-kickback statute.

Additional authorities for the OIG use of CMPL have been added in recent years. The Patient Protection and Affordable Care Act (ACA) added more grounds for imposing CMPs. These include, among other types of conduct, knowingly making, or causing to be made, any false statements or omissions in any application, bid, or contract to participate as a provider in a federal health care program (including Medicare and Medicaid managed care programs and Medicare Part D). The ACA authorizes a penalty of up to $55,262 for each false statement, as well as activities relating to fraudulent marketing by MCOs, their employees, or their agents. The 21st Century Cures Act added more grounds for imposing CMPs, assessments, and exclusion from federal health care programs for fraudulent conduct in an HHS grant, contract, or other agreement. The OIG may assess CMPs of up to $10,000 per claim and assessments of up to three times the amount claimed for knowingly presenting a false or fraudulent claim. In addition, the OIG may impose a penalty of up to $50,000 and assessments of up to three times the amount of funds at issue: (1) for each instance of knowingly making a false statement in a document required to be submitted in order to receive funds under an HHS contract, grant, or other agreement; (2) for knowingly making or using a false record or statement that is material to a false or fraudulent claim; and (3) for knowingly making or using a false record or statement material to an obligation to pay or transmit funds or property owed to HHS. The OIG may impose a penalty of up to $10,000 per day and assessments of up to three times the amount at issue for knowingly concealing, or knowingly and improperly avoiding or decreasing, an obligation owed to HHS with respect to an HHS grant, contract, or other agreement. Finally, The OIG may impose a penalty of up to $15,000 per day for failing to grant timely access to OIG upon reasonable request for audits or to carry out other statutory functions in matters involving an HHS grant, contract, or other agreement.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 202o Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: New Jersey’s largest hospital system—Hackensack Meridian Health—subject to ransomware attack

Hackensack Meridian Health announced that it was the subject of a ransomware attack and paid an undisclosed amount to regain control over its systems. Hackensack is the largest health system in New Jersey with $6 billion in annual revenue, more than 35,000 employees, and 17 hospitals—including, Jersey Shore University Medical Center in Neptune, Hackensack University Medical Center, and JFK Medical Center in Edison. The attack brought down the computer network for two days, forcing hospitals to reschedule non-emergency surgeries and sending doctors and nurses scrambling to deliver care without access to electronic records. The health system promptly notified the FBI and other authorities and spoke with cybersecurity and forensic experts. The announcement included that health system had insurance coverage to help cover the costs associated with cyber-attacks—payment, remediation, and recovery efforts. The attack forced hospitals to reschedule nonemergency surgeries and doctors and nurses to deliver care without access to electronic records. The network’s primary clinical systems have now returned to being operational, and information technology specialists are working to bring all its applications back online. The announcement did not include that any patient information was subject to unauthorized access or disclosure.

This is another vivid reminder for health care organizations to prepare for and plan on how to respond to such an attack. Hospitals and providers of health care services continue to be a prime target to ransomware attacks. Their systems tend to be more vulnerable and dependence of their patient data is critical to their function. Any failure to have access to it can be extremely detrimental for patients.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.