Ileana Hernandez of Manatt, Phelps & Phillips Law Firm is a member of the firm’s healthcare litigation practice, discusses ways to combat healthcare fraud.
Hernandez mentions that there are many types of fraud in the US healthcare industry. “Healthcare fraud is essentially any type of scam or illegal activity where false claims are submitted concerning healthcare services or products, and is frequently related to health insurance benefits, Medicare and Medicaid programs.”
She also says that healthcare fraud can be categorized into three different types: criminal, civil, and billing. Criminal fraud consists of “false claims submissions relying on the use of irrelevant or omitted facts to obtain payment or reimbursement for goods and services.”
Civil fraud consists of “false claims submissions to obtain payment, in bad faith, for goods and services not actually provided or that is unnecessary due to an event or omission where the provider knew about it at the time.”
Billing fraud is when providers submit false claims, in bad faith, for goods and services actually provided.
Hernandez states that the False Claims Act (FCA) “is the primary legal weapon available to combat false claims” submitted by providers. She mentions that “the FCA prohibits any person or entity from knowingly presenting false or fraudulent claims for payment to the federal government, or using false records to get compensation.
She also discusses the fact that individuals who practice healthcare fraud are subject to civil damages and hefty fines. In addition, there can be harsh repercussions for those who are found guilty of committing healthcare fraud. “Every violation of the FCA, even an attempt or conspiracy to commit an act in violation of the FCA, is a felony criminal offense punishable by up to five years in prison or fines of $250,000.”
Hernandez also discusses the steps that should be taken to combat healthcare fraud. “The FCA provides powerful incentives for reporting fraudulent activity…After receiving an FCA claim or report, the federal government must have a reasonable basis to assert that it has been defrauded before it may assert its right to intervene in the case.”
She suggests that “the best defense is not only a strong compliance program but also reporting any issues or potential violations to the government. In addition, there are strict time limits for filing FCA claims and lawsuits, so healthcare providers must investigate any potential violations promptly.”
Hernandez also suggests that “healthcare providers should do the following to combat healthcare fraud: implement an effective compliance program, conduct internal audits, establish policies and guidelines for their employees, notify the government of suspected false claims, retain experienced professionals who can help assess any claims made to the government, and do what is necessary to avoid compliance issues.”
In closing, Hernandez says that “it is important for healthcare providers to be diligent in their efforts to combat healthcare fraud and complete an internal analysis of how their business operates.”
She also says that providers must promptly report any potential issues or violations to avoid legalities and preserve reputation.
In addition, she says that it is beneficial for providers to implement an effective compliance program and conduct internal audits to reduce the risk of healthcare fraud.
Hernandez concludes by saying, “healthcare providers need to monitor their business, keep good records and understand how they operate in terms of billing and claims submissions. In addition, they must be diligent in their efforts to combat healthcare fraud to avoid legalities and preserve their reputation.”