The U.S. Department of Justice (DOJ) has made cracking down on healthcare fraud its top priority in recent years. As a result, the FBI is devoting more than 1,000 agents to the task and creating a Health Care Fraud Division within DOJ’s Criminal Division.
As it works to fight this epidemic, DOJ recently took an essential step for any organization wanting to avoid compliance violations and criminal charges—the issuance of revised healthcare fraud guidance clarifying the Justice Department’s expectations for federally-sponsored health insurance plans.
The DOJ’s aim with this new guidance is two-fold. First, it seeks to clarify specific requirements that federal healthcare plans must meet to satisfy their legal obligations. Second, it aims to spell out the ramifications of healthcare fraud violations, including the risk of liability for aiding and abetting others in violating federal laws.
“The DOJ is serious about prosecuting health care fraud… But, to be blunt, they are looking for headlines,” said Ileana Hernandez of Manatt, Phelps & Phillips Law Firm and member of the firm’s healthcare litigation practice.
In addition to clarifying requirements for federal plans, DOJ wants to make it clear that anyone who aids others in committing or concealing health care fraud—including executives and board members—may face criminal liability under the Health Care Fraud Control Act (HCFCA) and the False Claims Act (FCA).
“The DOJ is now saying, ‘we want to make it very clear that you can be charged as a co-conspirator or as an aider and abetter if you stick your head in the sand and don’t ask to see documents related to potential fraud,” said Hernandez.
After this revision to the guidance, healthcare organizations now have a better idea of what is required for compliance with federal health care fraud laws—and are aware that their boards or executives won’t be able to ignore allegations of misconduct without potentially facing criminal charges.
The DOJ has made it clear that any organization that wants to avoid criminal prosecution and protect its employees and executives must adopt a compliance program designed to prevent and detect potential fraud, waste, and abuse in federally-sponsored healthcare plans.
“I think the message the DOJ is trying to get out is: ‘If you don’t develop a compliance plan, we may come after you,” said Hernandez.
Hernandez believes that the new guidance will help healthcare organizations avoid various legal problems in their long-term efforts to ensure compliance with federal health care fraud laws. Still, she warns that it only provides the minimum requirements for compliance with those laws.
“As with anything, there is always going to be a gap between what the DOJ requires and what organizations will do to comply with the law,” said Hernandez.
That means that healthcare organizations must remain vigilant in their efforts to protect themselves from compliance violations and federal criminal charges—a task that is easier than it may seem when you add in the scrutiny of private plaintiffs who can sue for damages.
“The DOJ is saying, ‘we are not going to be your only source of liability—you have private plaintiffs who may be able to bring claims under the False Claims Act, which provides for treble damages and civil penalties.’ So all these things must be addressed by healthcare organizations,” said Hernandez.