The Law and Government Institute
hosted Neely Sharp Griffith, Esq. of Jones Walker on Monday, April 19, 2010. Griffith gave a lecture, entitled “Health Care Fraud and Abuse in an Era of Reform” from 4 p.m. to 5 p.m. in the main law building.
The presentation focused on types of health care abuse, tools to fight abuse, changes to the new health care reform, and the industry impact. Griffith suggested that the most common types of health care fraud include billing for items or services not rendered, duplicate billing, billing for medically unnecessary services, “upcoding”, “unbundling,” false cost reports, physician self referrals, and financial arrangements between hospitals and hospital-based physicians not in compliance with the law.
Griffith explained that it is important to deter health care fraud because approximately $68 billion is lost per year to health care fraud. In 2008, $10 million was lost in the Medicare program alone. Fraud against both public and private health plans is estimated to be around $72-$220 billion annually.
The federal government has created many tools to combat fraud and abuse such as statutes including the False Claims Act, Civil Monetary Penalties Statute, Self-Referral/Stark Amendments, Anti-Kickback statute, Medicaid False Claims Statute, and the Health Insurance Portability and Accountability Act. Additionally, the government has created agencies to fight health care fraud, including the Health Care Fraud and Abuse Control Program, Medicare Integrity Program, Beneficiary Incentive Program, Medicare Fraud Strike Forces, and the National Health Care Fraud Prevention and Enforcement Team (“HEAT”).
The government has also increased the consequences of committing health care fraud. If a civil charge is brought then there are civil fines and injunctions. If a company is brought to suit under criminal charges then they may face asset forfeiture, criminal fines, or incarceration. When administration penalties are given, then the company is suspended from Medicare payments or may be excluded from participation in Medicare/Medicaid. Griffith suggested this is a “death sentence” for most insurance companies because this is where a large percentage of their profits come from.
Griffith explained that one of the changes that Health Care reform includes is the Fraud Enforcement and Recovery Act of 2009 that was signed by President Obama on May 20, 2009. This act significantly expands the federal government’s power to prosecute fraud against the government. Another important Health Care reform that she discussed included the Anti-Kickback Statute that relaxed the intent requirement and allowed an Anti-Kickback Statute violation to be the basis for a False Claim Act liability. The revisions for this act became effective on March 23, 2010. These are just a few of many changes in the Health Care reform concerning fraud and abuse that were discussed.
Griffith concluded by indicating her concerns for the industry impact of the new Health Care reform. She feels that although the reform provides an effective and significant change, it also creates some unintentional pitfalls. The cost of compliance has greatly increased. Also, some of the violations, such as retentions of overpayments past 60 days may lead to FCA liability amd create severe repercussions.
Neely Sharp Griffith is a partner in the Business and Commercial Litigation Practice Group and a member of the Corporate Investigations & White Collar Defense practice at Jones Walker in New Orleans, Louisiana. A graduate of Rhodes College, Griffith earned her J.D., magna cum laude, from Tulane University Law School in 2002.