Ileana Hernandez of Manatt Explains Why the Government is Aggressively Prosecuting Healthcare Fraud

The Department of Justice (DOJ) and the Federal Bureau of Investigations are aggressively prosecuting healthcare fraud, said Ileana Hernandez of Manatt, Phelps & Phillips Law Firm, and a member of the firm’s healthcare litigation practice.

Hernandez says the DOJ has been working with the False Claims Act (FCA) to aggressively prosecute healthcare fraud, referring specifically to a recent case involving Medicare Advantage and Medicaid Fraud.

In that case, which involved UnitedHealthcare subsidiary AmeriHealth Caritas, a New Jersey-based physician pleaded guilty for accepting nearly $4.5 million in bribes and kickbacks for patient referrals to his own practice, according to the DOJ.

Hernandez believes the healthcare industry will only see more of these types of cases go forward because it is a high priority for law enforcement agencies and prosecutors.

The large settlement amount involved with this case brings awareness that the government is serious about prosecuting healthcare fraud, with reporters describing it as a “landmark” case.

“There has been an increase in the number of investigations brought by the DOJ with criminal charges under the Fraud Enforcement Recovery Act (FERA) and FCA,” said Hernandez.

Hernandez added that Manatt currently represents several hospitals in False Claims Act cases and other healthcare fraud investigations.

“We’re seeing a great deal of interest in the health care sector from federal and state regulators,” said Hernandez. This interest comes in the form of increased investigations, audits, and False Claims Act cases on behalf of private relators.

In 2013, there was a record-breaking $3.5 billion in total settlements from health care fraud matters under FCA, according to a DOJ news release. This amount was double the yearly average since 2009.

Hernandez described a recent case where a California-based mental health provider was charged with false claims against the Medicare and Medicaid programs. The criminal case goes back to 2010, but this is just one of many False Claims Act cases brought in the past several years.

“The DOJ also has an increasingly significant role under FCA,” said Hernandez, explaining that the FBI is focused on investigating big healthcare schemes.

“Our clients are under an extraordinary amount of scrutiny, and it is vital to be proactive in understanding their exposure to False Claims Act liability,” said Hernandez. “While there are no specific rules for self-disclosure of information by providers to state or federal agencies, quick reporting of potential fraud is usually preferred.”

“The government is on the lookout for patterns of suspicious payments, large over-payments, and duplicate billing,” said Hernandez. “Healthcare companies need to vet themselves by looking at their payments regularly thoroughly.”

Hernandez recommends that providers consider giving private attorneys information to help them protect themselves and their organizations.

She also recommends that if the providers suspect potential fraud, they report it to facilities and quickly work with them to investigate and take corrective action.

“I think we’re going to continue to see more criminal prosecutions coming down the pipeline,” said Hernandez, adding that she doesn’t see any slowdown in terms of civil False Claims Act cases either.

“Health care fraud is a high priority for the government,” she said.