According to the Health Care Fraud and Abuse Control Program’s 2009 report, criminals could steal approximately $38 billion from the Medicare system. That is enough money to fund NASA for more than ten years.
This massive issue has led law enforcement individuals on a crusade against healthcare fraud. John LeBlanc of Manatt is an expert in this field, working as a partner in Manatt’s national healthcare litigation division.
Mr. LeBlanc recently talked about the issues and what we can do as a society to reduce healthcare fraud.
Q: What is healthcare fraud, and what are some examples of it?
A: Healthcare fraud exists when false claims are submitted to health insurance companies for payment. The False Claims Act imposes liability on any person or entity that offers a claim to the government that it knows, or should know, is false or fraudulent.
Q: How do criminals manipulate the system to steal money? What are some examples of tactics they use?
A: Criminals can commit healthcare fraud through a host of schemes, including physical therapy, outpatient evaluation, and management (E & M) services, home health care, or durable medical equipment (DME). Some strategies that criminals use to evade detection are splitting up their operations into smaller companies, or “shell” companies, so they aren’t as visible; using the names of licensed physicians who don’t supervise services furnished under their name; and billing for items not covered by insurance, like false durable medical equipment (DME) or physical therapy.
Q: You mentioned a few tactics that criminals use. What common mistakes do they make that can lead them to being caught?
A: In general, their schemes are more likely to be detected if one individual has complete control over the services provided and the billing process. If an examiner determines that all of those services were directed or supervised by the same person, that’s more likely to be prosecuted.
Q: What are some characteristics of a criminal who commits healthcare fraud? How do they compare with other criminals?
A: Unlike other crimes, it is typically beneficial for the criminal to get caught because they can only defraud the government once. They face hefty penalties, including fines of up to $10,000 or three times the value of the fraud plus up to 5 years in prison.
Q: What are some recent examples of healthcare fraud? Since they are very sophisticated, what goes into their mindset to commit these crimes without getting caught?
A: Some recent examples of healthcare fraud include: a physician who collected $8.4 million for off-label use of his drug; a psychiatrist paid $500,000 to write prescriptions for unnecessary controlled substances and collected $1.8 million in payments from Medicare and Medicaid for services he never provided; and a physician that collected more than $100,000 from Medicare as a “consultant” for patients that he never saw.
The criminals who commit this fraud are constantly thinking of new and creative ways to defraud the system. It is a challenge for law enforcement persons to stay on top because they have so many different strategies. The best way to catch these people is by being alert to red flags, like one person directing all the services and billing.
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