Assistant Attorney General Says Criminal Division Fraud-Fighting Efforts Include Labs

Laboratory services are on the list of targets for the Medicare Fraud Strike Force, according to Assistant Attorney General for the Criminal Division of the Department of Justice, Leslie R. Caldwell, who addressed the American Bar Association’s 25th Annual National Institute on Health Care Fraud (May 14, 2015). Caldwell highlighted the Criminal Division’s health care fraud fighting efforts over the past 25 years, current strategies and future objectives. “Stamping out Medicare fraud and holding those who commit this fraud accountable are core missions of the Criminal Division and the Justice Department.”
Past successes Caldwell contrasted early enforcement efforts, which relied on Centers for Medicare and Medicaid Services to refer cases to the Department of Justice, with current efforts in which the Medicare Fraud Strike Force’s “intensive health care fraud enforcement efforts” target billing issues most often subject to fraud. The Strike Force’s achievements since its start in 2007 are significant. As Caldwell noted:

• 2,100 defendants charged (relating to $6.5 billion in Medicare billings) since 2007;
• In the most recent fiscal year, 353 defendants charged (relating to $830 million in Medicare billings), 304 guilty pleas and 41 convictions;
• In May 2014, the seventh “takedown” of a nationwide operation, with 90 individual physicians, nurses and other professionals charged (linked to $260 million in Medicare billings)

New fraud-fighting methods Advances in data collection and usage are helping the Strike Force achieve its success according to Caldwell. “The Strike Force is a model of 21st Century data-driven policing.” Strike Force now uses nearly real-time billing data from CMS to “bring cases more quickly” and “identify emerging fraud schemes and new types of Medicare fraud” or existing fraudulent conduct that is expanding geographically. Caldwell asserted that such efforts have led to reduced health care fraud activity by “hundreds of millions of dollars.” She also advised that the Division is using “traditional investigative techniques” including undercover officers, wires, bugs, hidden cameras, and GPS tracking. Strike Force is also pursuing high-level individuals including physicians and executives as well as multi-district cases, she noted.
Future enforcement Noting that “Medicare Fraud remains a serious drain on our health care system” and the $3 billion in fraudulent Medicare billings recouped by the Department of Justice in 2014, Caldwell turned to discussion of future enforcement efforts, specifically highlighting laboratory services. “Strike Force is looking at emerging fraud trends, and we are seeing those in areas including Medicare Part D, laboratory services, hospital-based services and hospice care. These are the latest frontiers in Medicare fraud. … [W] e are working hard to identify those engaged in these new schemes and to bring them to justice.” Discussing prosecution of corporate entities, Caldwell explained the value of corporate cooperation, indicating that principles the government has applied in the financial sector are “equally applicable” to health care. Entities seeking to benefit from alleged cooperation must “conduct a thorough internal investigation and turn over all available evidence of wrongdoing to our prosecutors in a timely and complete way” and identify culpable individuals, even if evidence points toward high level executives. “A company should not expect to receive cooperation credit for just producing documents in response to a grand jury subpoena,” explained Caldwell. “To the contrary, compliance with lawful process is a legal requirement, not voluntary cooperation.” In discussing the criminal division’s collaboration with the Civil Division on parallel prosecutions, Caldwell noted that prosecutors consider the severity and pervasiveness of the alleged activity and the culpability of individuals, among other factors, when deciding whether to bring criminal prosecution. Finally, Caldwell highlighted the growing dangers of cyber breaches and asked organizations to cooperate with the Division in fighting back against cyber criminals. She also pointed out the Division has provided guidance to help avoid and mitigate the risk of data breaches. Takeaway: Fraud enforcement in the laboratory sector doesn’t appear to be abating any time soon as the Department of Justice names laboratory services as a focus of its efforts.