Legal Insight: Healthcare Fraud Top of Mind for Federal Investigators in 2018

Bass, Berry & Sims’ Brian Roark expects more scrutiny of Medicare Advantage, EMR software and opioid prescriptions

Each year, Bass, Berry & Sims publishes a Healthcare Fraud and Abuse Review that highlights the overarching trends and pivotal cases from the previous twelve months.

Following the release of this year’s report, Jarrard Inc.’s Vince Galloro sat down with Healthcare Fraud Task force head Brian Roark to discuss whether the government’s pursuit of healthcare fraud will slow down anytime soon, how the Trump administrations could impact enforcement and ways healthcare leaders can stay on the ball to prevent an investigation.

Vince Galloro: Presidential administrations come and go, power changes hands in Congress, and, despite deep partisan divides on virtually every other healthcare issue, bipartisan support for aggressive healthcare fraud enforcement remains constant. What factors explain that?

Brian Roark: For starters, there is one very practical reason: The federal government earns a significant return on its enforcement efforts. For every $1 it spends on enforcement, the federal government takes in at least $5 in recoveries, typically (for example, see this HHS-OIG report (PDF, p. 8)).

The politics of healthcare also bridge the partisan divide. Healthcare makes up a significant share of both federal and state budgets, so making sure that healthcare dollars are not being diverted to fraudulent ends is a high priority for both Republicans and Democrats. And voters rank it near the top of their concerns in most election cycles.

VG: At the same time, we have heard a lot in the news about the Trump administration’s push to simplify the regulatory environment for business. Do you see evidence of that in healthcare?

BR: Well, we have seen direct evidence of that in healthcare fraud enforcement.  First, in January, there was the leak of a DOJ memorandum that sets forth factors for DOJ’s evaluation of whether to seek dismissal of FCA cases where DOJ has declined to intervene in the lawsuit and which may lead to more frequent dismissals of qui tam cases. Later that same month, DOJ’s Associate Attorney General released a memorandum that limits DOJ’s use of agency guidance documents to establish liability in affirmative civil enforcement cases.

VG: What are some key areas that you expect to be under even greater scrutiny in 2018?

BR: The growing popularity of Medicare Advantage health plans is translating into more scrutiny of the patient data these plans report. Those data affect the risk-adjusted per member per month payments the plans receive, and as more beneficiaries choose MA plans, there is more money for whistleblowers to go after.

The certification that electronic medical records software meets “meaningful use” criteria that enables provider companies to receive incentive payments is another area being closely watched.

And individual civil and criminal liability for executives remains an important target of the government’s efforts. The government’s practices related to the 2015 DOJ memorandum on “Individual Accountability for Corporate Wrongdoing,” commonly referred to as the “Yates Memo,” continue to evolve.

Last, I expect to see more fraud enforcement cases brought relating to the distribution and prescribing of opioids.

VG: Finally, what advice would you give to healthcare leaders about the risks they face in fraud enforcement? How should new players who are trying to disrupt the industry think about these risks?

BR: Companies in healthcare and other industries that supply goods or services to the federal government have extra incentive to ensure their compliance programs are robust and kept up to date. Just as importantly, leaders must ensure they have instilled a culture of compliance within their organizations. The best compliance program on paper can be rendered ineffective if cultural cues signal that the program is no more than words on paper.

For executives and companies that are new to healthcare, it’s worth thinking very hard about the impact your company and its products and services will have. When developing software for consumers in most areas, the damage done by a bad release can usually be undone by a subsequent version. When people put their health and wellness in your hands, however, you carry the risk of doing irreversible damage – think of a software mistake that leads to a fatal drug interaction. “Move fast and break things” must be tempered by constant awareness of that risk. And that carries over to compliance, too.

Brian D. Roark is the head of Bass, Berry & Sims’ Healthcare Fraud Task Force and concentrates his practice on representing healthcare clients in responding to governmental investigations and defending False Claims Act lawsuits.

Jarrard Inc.