Allegations of health care fraud can be prosecuted by state court prosecutors or by federal prosecutors.  State court prosecutions involve a state prosecutor, typically a Deputy District Attorney, filing charges in the county superior court.  Most larger health care fraud cases are prosecuted by federal prosecutors.  The Department of Justice’s Health Care Fraud Unit has more than 50 prosecutors who specialize in prosecuting health care fraud related cases involving allegations of patient harm and/or large financial loss. These federal prosecutors use a “Strike Force Model” that includes various federal agencies, including the Federal Bureau of Investigation (FBI), the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Drug Enforcement Agency (DEA), and others.  In addition to these federal prosecutors who specialize in health care fraud, there are dozens of other federal prosecutors that prosecute health care fraud as part of their overall caseload that includes other types of white collar fraud. Health care fraud prosecutions have become a top priority for federal prosecutors and this trend is expected to continue.  Recent reports show that federal prosecutors are collecting six dollars in fines, restitution and civil settlements for every dollar that is spent on the investigation and prosecution of health care fraud.

Health care fraud prosecutions are typically based upon an allegation that a medical provider or a health care business, such as a hospital, pharmacy or lab, submitted fraudulent billing to Medicare, Medicaid or an insurance company.  It is not uncommon for prosecutors to mistakenly believe that medical billing errors are fraudulent, which in fact the errors were an honest mistake. A lack of fraud is a defense to a criminal case.

If you receive a Civil Investigation Demand (CID), a health care audit request, or other federal law enforcement contact, you have been put on notice that you or your organization is being investigated.  Your best course of action is to hire counsel immediately to attempt to prevent the matter from proceeding to the filing of criminal charges through an Indictment or Complaint. Federal and state prosecutors are often willing to wait to file charges if your attorney represents that he can provide information relevant to the investigation.  These types of cases often become a “battle of the experts” and if you or your business has a competent expert who has the opinion that no fraud occurred the prosecutors will be more likely to turn the case down for prosecution or elect to proceed in a manner that is civil in nature rather than criminal.

In a recent federal prosecution in which our firm was hired after a federal Indictment had already been filed, we hired an expert who has served for more than 15 years on the CPT Code Review Committee.  This expert wrote a lengthy opinion in which he found that the physician had billed the procedure under one of two correct CPT Code sections. The result was that the Government entered into a Deferred Prosecution Agreement in which the client admitted no wrongdoing and the case was dismissed in its entirety after an agreed-upon amount of time.

Federal and state prosecutors are also focused on prosecuting crimes related to the Opioid crisis. These investigations often focus on providers that prescribe or dispense large amounts of opioids. However, variations in providers’ practice areas and/or patient populations may account for suspected over-prescribing or over-dispensing.

Other types of cases that can result in federal intervention include criminal, civil and administrative enforcement in kickback cases (the Stark Law, 42 U.S.C 1320a-7b)) and False Claims Act (18 U.S.C. 287) cases.  Many of these investigations begin with a whistleblower’s report of alleged wrongful conduct, and the whistleblower is often a former employee or competitor.  These whistleblowers can receive financial compensation in Qui Tam cases.