Healthcare fraud is a growing problem in the U.S., according to the Department of Health and Human Services, Office for Civil Rights (OCR). The OCR has issued several publications to help health care providers prevent incidences of fraud in the industry. Ileana Hernandez of Manatt helps shed light on how to protect one’s business from fraud.
Health care fraud costs the country millions of dollars each year, according to Hernandez. “The federal government has said it is losing $60 billion a year,” she said. “That data is often debated, but there’s certainly billions of dollars that are lost every year due to healthcare fraud or abuse.”
As the industry changes, organizations must make sure to protect themselves from fraud. “That’s why it’s so important for health care providers to understand the federal and state anti-fraud statutes,” Hernandez stated. “Those laws are constantly changing because of new developments in healthcare reform. For example, the Stark law has changed over time, and there’s more and more regulation of the industry.”
Hernandez said that rules and regulations related to fraud and abuse in healthcare could be complicated and difficult to understand, even for seasoned attorneys. “There are a lot of health care fraud cases that we handle involving Stark law violations or kickbacks,” she explained. “It is an area that is constantly evolving, so staying on the cutting edge of changes is important for attorneys who work in this area.”
The Department of Justice (DOJ) allows violators to self-disclose fraud when possible, according to Hernandez. “That is often referred to as a ‘Whistleblower Action or Bounty Action,’ which provides an opportunity for physicians, pharmacists, or people who have knowledge of fraud to report it under certain circumstances and potentially receive a financial reward.
Hernandez stated that those who know about healthcare fraud should consult an attorney about whistleblower actions and the rules surrounding reporting.
“I think that people should be critical and ask: ‘What is the basis for this? Is it true? Has anything occurred that would support me putting my name on a whistleblower action, or has something occurred to incentivize me to do so?'”
Hernandez added, “People have to be careful because there are rules governing whistleblower actions, including the requirement that you go through the government first before you can file your claim.”
To avoid potential liability under these anti-fraud statutes, organizations should create a comprehensive compliance program. There are many guidelines for compliance programs, but healthcare providers must ensure their compliance program includes the following six components:
1. Written Standards of Conduct for Employees
2. A Code of Ethics for Board Members
3. Compliance Training Programs
4. Designated Person or Persons with Responsibility for Compliance Matters
5. Procedures to Monitor and Supervise Third-Party Service Providers
6. An Effective System of Internal Controls
In addition to the six components above, organizations should implement a compliance hotline for employees to report concerns anonymously and train supervisors to identify signs of potential federal healthcare fraud.
“Health care providers need to be proactive about preventing violations before they happen,” Hernandez said. “By implementing a compliant program and making sure to educate their staff on it, organizations can greatly reduce the risk of being involved in a federal healthcare fraud investigation.”
Hernandez concluded by reminding providers that understanding the various anti-fraud provisions is critical for every organization member because everyone will be held liable under these statutes.
“It’s important for healthcare providers to know their obligations under these laws, what they allow and do not allow, and to make sure that the organization is staying compliant with all federal regulations.”