The health care system in the United States is a hotbed for fraudulent activity. Criminal allegations often follow inaccurate or false billings to Medicare or state run Medicaid programs. In 2009, the federal government created the Health Care Fraud Prevention and Enforcement Action Team (HEAT) to combat waste, fraud and abuse in the health care system. These teams analyze data to locate suspicious billing practices in various cities across the country. The government estimates up to 10% of the health care costs in the United States are a product of waste and abuse.
Fraudulent Billing to Medicare (Medicare Fraud)
Most indictments for health care fraud involve unlawful billings to the Medicare or Medicaid system. The fraudulent billing schemes in the health care industry are always evolving. However, most schemes fit neatly into a few large categories. Some of the common schemes that we see in health care fraud cases are: 1) upcoding – providing one product to a patient and billing for a more expensive product or billing for a more expensive service than the one rendered, 2) billing for services that were not performed, 3) billing for services that were not medically necessary, 4) kick-back schemes – paying a person to refer patients in order to bill Medicare or Medicaid for services, and 5) fragmented billing – billing Medicare for tests separately to maximize the reimbursement. The individualized schemes under these headings vary. The focus of the federal government is to stay up to date on trends in fraudulent activity. For example, our firm represented a professional charged with health care fraud under the kick-back theory above. The government alleged the client was referring patients for unnecessary therapy services and obtained cash payments for each referral. This scheme permeated multiple clinics and nursing homes across the state of Texas. Once the government identified the practice, they worked to bring down as many clinics as possible in the span of a few years. Once this scheme is marginalized, new ones emerge. In 2020, the federal government seems to be focusing on medical necessity cases, improper billing for therapy services, and kick back schemes involving labs and pharmacies.
Medicare fraud requires the government to prove the facts underlying the fraudulent scheme. But it also requires the government to prove the physician acted knowingly and with the intent to defraud the Medicare system. This means the government must prove the defendant knew the claims were false when they were submitted. This defense is highlighted by the medical necessity cases above. If the physician honestly believed the procedures were medically necessary when the claims were submitted, the government will fail to prove the guilty mind required for a health care fraud conviction. Most defenses to Medicare fraud involve a challenge to the mens rea elements.
Unlawful Distribution of Schedule I and II Drugs
The opioid epidemic has pushed the government to focus investigative resources on doctors who write prescriptions for various schedule I and II drugs. Most of these investigations focus on doctors or clinics writing prescriptions for oxycodone and hydrocodone in amounts that far exceed their peers. There are many common practices that are interwoven throughout these cases: 1) the doctor runs the clinic on a cash basis, 2) the clinic sees a high number of patients, 3) the PMP will show the doctor writes similar prescriptions for all patients (often oxycodone with a muscle relaxer), 4) the doctor turnover at the clinic is high, and 5) the patients are often brought to the clinic by a recruiter.
These investigations normally start with the government reviewing the PMP data for various physicians. If the PMP shows the doctor is writing a large number of narcotic prescriptions, the government will begin watching the clinic. Their investigation will attempt to establish some of the common themes above. Often, these investigations will involve a confidential informant who the doctor trusts. The government may record telephone calls or video record informant meetings to establish the facts needed for prosecution.
Under this theory of prosecution, the government must show the professional knowingly and intentionally distributed a scheduled substance outside the regular course of medical practice and not for a legitimate medical purpose. Normally, the government uses the high patient rates, cash nature of the business, and lack of normal examinations to meet the elements of the offense. However, regardless of the clinic’s practice, the government must prove the physician, or other charged party, knew the prescriptions were submitted without a legitimate medical purpose. If the physician is not aware of the inner workings of the clinic, or other professionals are writing prescriptions through their EMR, the government may struggle to prove the knowledge element. Most defenses to these allegations challenge the mens rea for the offense.
The criminal defense attorneys at Odom, Davis & Hobson have represented numerous professionals charged with health care fraud. Our attorneys have over 40 years of experience in building defenses to health care fraud allegations – representing doctors, nurses, home healthcare agencies, pharmacies and suppliers of medical equipment.
Protect Your Practice
Our firm understands the lasting impact a health care fraud prosecution can have on a professionals’ practice. Our first goal is to stop the investigation prior to criminal charges. At times, the government will forego criminal charges if the target of the investigation agrees to a monetary settlement. This is a result that is unlikely to occur after criminal indictment. It is important the lines of communication are opened early in the investigation.
If an investigation cannot be settled civilly, a criminal indictment is likely to follow. Many times, a physician has already been indicted when they make contact with our firm. The criminal indictment will have an immediate impact on a professional’s career. A criminal allegation will result in questions from hospitals or other clinics about the validity of the physician’s privileges. Most hospitals will attempt to remove privileges during the criminal process. The very first step is to work out a deal with the government, the district court, and the various healthcare agencies/boards, to keep the client working while the criminal process moves forward. Often, this can be achieved by agreeing to not bill Medicare for any service or not perform certain procedures at issue in the indictment.
Once we have worked out the professional side of the criminal process, our firm begins preparing for trial. This process involves extensive client meetings to learn the practice, hiring experts, meeting with witnesses and employees, and obtaining relevant patient charts. After obtaining the relevant documentation, we begin preparing a defense strategy built on challenging the facts and the guilty mind required for conviction. Our firm has tried numerous health care fraud cases, and we are ready to take these cases before a jury.
In 2018, our firm was hired by a physician charged with 25 counts of health care fraud (unlawful billing of Medicare for medically unnecessary procedures). Following a two month trial, the judge returned a verdict of not guilty on all 25 counts in February of 2020. The defendant is no longer facing criminal prosecution, and he will be able to continue the practice of medicine. To read more about the details of this case, click here.
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Below are articles written by our attorneys on health care fraud defense:
- Not Guilty on All Counts – Health Care Fraud (Part I)
- Not Guilty on All Counts – Health Care Fraud (Part II)
- Not Guilty on All Counts – Health Care Fraud (Part III)
- Overview of the Medicare Program