SJCONSULTINGPARTNERSBI-MONTHLYNEWSLETTER Issue1

SJ Consulting

Partners Bi-Monthly Newsletter

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TEL:832-844-0064/832-497-7595E-MAIL:SJCONSULTINGPARTNERS@GMAIL.COM NOV-DEC2016

HealthCareFraudThis issue will focus on Health Care Fraud, whichremainsakeyprioritybyfederalauthorities.Twentyyears ago, the Health Insurance Portability andAccountability Act of 1996 (HIPAA) established anational Health Care Fraud and Abuse ControlProgram under the joint direction of the AttorneyGeneral and the Secretary of the Department ofHealth and Human Services (HHS), to coordinatefederal, state and local law enforcement activitiesrelatingtohealthcarefraudandabuse.

Since then, the relentless focus on fraud detection,deterrence and enforcement continues to yieldsignificant result. In a continuing effort to stemhealth care fraud, the Medicare Fraud Strike Forceoperations,partoftheHealthCareFraudPrevention&EnforcementActionTeam(HEAT),ajointinitiativebetweentheDepartmentofJusticeandHHStofocustheir efforts to prevent anddeter fraud andenforcecurrentanti-fraudlawsaroundthecountry.

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SinceitsinceptioninMarch2007,theMedicareFraudStrikeForcehaschargedover2,900defendantswhocollectivelyhavefalselybilledtheMedicareprogramforover$8.9billion;1,781pleadedguilty,243otherswere convicted in jury trials, and 1,477 weresentencedtoimprisonment.

Some of those charges garnered media attention.E.g. inJune2016, theDepart.of Justice reportedanunprecedented nationwide sweep by the MedicareFraudStrikeForce in36federaldistricts, resulting in

charges against 301 persons, including 61 doctors,nurses and other licensedmedical professionals, fortheir alleged participation in health care fraudschemesofapprox.$900millioninfalsebillings.

AnatomyofFraudClaims

Prosecutors rely primarily on the federal lawsgoverningMedicarefraud,suchas:

• theFalseClaimsAct(FCA);• theAnti-KickbackStatute(AKS);• and the Physician Self-Referral Law (Stark

Law).

FalseClaimsAct(FCA)

The FCA protects the Federal Government frombeing overcharged or sold substandard goods orservices.TheFCAimposescivilliabilityonanypersonwho knowingly submits, or causes the submissionof, a false or fraudulent claim to the FederalGovernment.The terms “knowing” and “knowingly”mean a person has actual knowledge of theinformation or acts in deliberate ignorance orreckless disregard of the truth or falsity of theinformation related to the claim. An example isknowinglysubmittingclaimstoMedicareformedical

servicesnotprovided.CivilpenaltiesforviolationsoftheFCAfromNov.2,2015mayincludefinesofupto3 times the amount of damages plus up to $21,563per falseclaimfiled. Criminalpenaltiesmay includefines,imprisonment,orboth.

Anti-KickbackStatute(AKS)

TheAKSmakesitacrimetoknowinglyandwillfullyoffer, pay, solicit, or receive any remunerationdirectlyor indirectly to induceor reward referralsofitems or services reimbursable by a Federal healthcareprogram.Whereaprovideroffers,pays,solicits,or receives unlawful remuneration, the providerviolatestheAKS.

Remuneration includes anything of value, such ascash,freerent,expensivehotelstaysandmeals.

Anarrangementthatsatisfiescertainregulatorysafeharborsmay not violate the AKS. Civil penalties forviolating the AKS may include penalties of up to$50,000perkickbackplusthreetimestheamountof

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kickback. Criminal penalties for violating the AKSmayincludefines,imprisonment,orboth.

PhysicianSelf-ReferralLaw(StarkLaw)

The Stark Law prohibits a physician frommaking areferralforcertaindesignatedhealthservicespayableby Medicare or Medicaid to an entity in which thephysician (or an immediate family member) has anownership/investment interest or with which he orshe has a compensation arrangement, unless anexceptionapplies.

Submitting a claim that a provider knew or shouldhaveknownwasfalseconstitutesaviolation.

Examplesofimproperclaimsinclude:

• Billingforservicesthatwerenotrendered• Billingforservicesthatwerenotmedically

necessary• Billingforservicesperformedbyan

improperlysupervisedorunqualifiedemployee

• BillingforservicesperformedbyanemployeeexcludedfromparticipationinFederalhealthcareprograms

• Billingforservicesofsuchlowqualitythattheyarevirtuallyworthless

TheProof

To obtain a conviction for violating the health carefraud statute, the government must prove that thedefendant

• knowingly and willfully executed [attemptedtoexecute] a schemeor artifice todefraudahealthcarebenefitprogram;

• actedwithspecific intent todefraudahealthcarebenefitprogram;

• used false or fraudulent pretenses,representations and promises which werematerial;and

• the operation of the health care benefitprogramaffectedinterstatecommerce

TheIndictment

Most of the cases in Texas involved conspiracy tocommit health care fraud, and conspiracy to violatethe anti-kickback statute, while some includedmaking false statements, identity theft, payment orreceiptofkickbacks,andmoneylaundering.

Sentencing

Health care fraud is punishable by imprisonment ofnotmorethan10yearsandafineofuptoaquarter-million dollars for an individual or a half-milliondollars for an organization. If the fraud results inserious bodily injury the penalty increases to notmore than twenty years. And if the fraud results indeath,thepenaltyincreasestolifeimprisonment.

StayOutofJail

With the aggressive prosecution of fraud claims, itbecomes critical to watch out for red flags, ensurethat your staff is fully training and your operationsare in compliance with the law. Compliance is notmerely a matter of maintaining your license tooperate;italsohasreputationalimplications.

SJConsultingPartnersCanHelp

SJ Consulting Partners has experiencedconsultants that can assist with your health carecomplianceneeds.

Contact us by e-mail atSJConsultingPartners@Gmail.com or by phone at832-844-0054or832-497-7595.

Subscribe to our blog atwww.sjhealthcareconsultingpartners.wordpress.com/blog/

Check out our website:www.sjhealthcareconsultingpartners.wordpress.com

SJCONSULTINGPARTNERSBI-MONTHLYNEWSLETTER Issue1

AboutThisNewsletterThis is bi-monthly newsletter by SJ Consulting Partners publishes information, incisive analysis, and tips that may be of practical help to the general public. This issue is on healthcare fraud but future issues will address other areas of interest. Please note that the materials, analysis and opinion in this newsletter are for informational purposes only and do not create any relationship with SJ Consulting Partners. For confidential consultation, please contact our office at 832-844-0064 or by e-mail at SJConsultingPartners@Gmail.com. You may subscribe to future issues of this newsletter through our website (www.sjconsultpartners.wordpress.com) or by sending us an e-mail at SJConsultingPartners@Gmail.com. Our mailing address is P.O. Box 840092, Houston, Texas 77284. We appreciate your feedback. Thank you.