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The Risks
What's at Risk
Federal scrutiny and investigation leaves your organization wide open to the potential for:
- Staggering fines and penalties.
- Corporate probation and intrusive federal monitoring.
- Exclusion from the Medicare and Medicaid programs.
- Criminal liability and prosecution of corporate employees, officers and directors - including imprisonment.
An effective corporate compliance program can reduce or eliminate these risks. Identifying and prosecuting healthcare fraud is a top priority of the Department of Justice, second only to violent crime.
The Stakes Are Higher Than Ever Before
HIPAA
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) increased the criminal, civil and administrative penalties for providers that violate healthcare program provisions:
- Imposing severe penalties for activities the government considers fraudulent, regardless of whether they are intentional.
- Granting the government the authority to prosecute fraud perpetrated against the private health insurance industry as well as the managed care industry.
- Creating the "Medicare Integrity Program" and giving the Health Care Financing Administration (HCFA) specific contracting authority, consistent with Federal Acquisition Regulations, to enter into contracts with entities to promote the integrity of the Medicare program.
Fraud Investigations
The number of fraud investigations is also increasing. The FBI has 300+ agents working solely on healthcare fraud cases, and that number is likely to increase due to the increase in "whistleblower," or qui tam, lawsuits being brought against healthcare organizations. The Federal False Claims Act provides financial incentives for people to report any known healthcare fraud to the government. In most cases, the lawsuit is brought against a healthcare organization by an employee who first reported it to his or her employer but received an unsatisfactory resolution.
Lawsuits are on the Rise
In 1987, only 33 qui tam cases were filed. In 1998, more than 417 cases were filed. In addition, the Department of Justice ("DOJ") recovered more than $2.6 billion in these whistleblower cases from 1986 to 1997. Individual qui tam relators recovered more than $335 million. In 1998, 61 percent of qui tam cases involved the U.S. Department of Health and Human Services.
The Government is Watching You
The government's focus on healthcare fraud has penetrated virtually every aspect of the healthcare delivery system. Hospitals, physicians and home health agencies, DME suppliers and ambulance companies, laboratories and health plans (HMOs) are all among industry segments that have been the subject of extensive enforcement activities and investigative initiatives.
An Ounce of Prevention
The best way for a healthcare provider to protect itself from criminal liability and reduce the exposure of its employees to prosecution for a white-collar criminal offense is to develop and implement a corporate compliance program. Larger providers require a more extensive program, but all providers, both profit and non-profit, need comprehensive, effective corporate compliance plans.
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