The June 22 announcement of federal charges against 301 medical professionals accused of more than $900 million in fraudulent billing is a significant indication that the government is serious about increasing its pursuit of health care fraud indictments. 

The charges represent the largest number of arrests the Department of Justice’s Medicare Fraud Strike Force has made since it was founded nine years ago. Doctors, pharmacists, physical therapists, home health care providers and other medical professionals were among those arrested. It is also the largest dollar amount, spread over 36 districts.

In the past, many of these kinds of cases were handled through sanctions and settlements, or the corporate entity alone was deemed responsible. However, the new charges indicate the DOJ is following up on its intention to more aggressively pursue criminal cases and direct renewed attention to individuals. (See previous blog entries here and here.) Traditional criminal prosecutorial tactics are being used for the first time on a large scale for Medicaid and Medicare fraud cases, with search warrants on doctors, pharmacists and other medical professionals’ homes and for their emails and text messages.

So, in light of this sea change for health care fraud prosecution and defense, what are the best practices for health care providers to better position themselves for the increased scrutiny?

First, corporations should recognize that the DOJ intends to seek to hold both corporate entities and responsible individuals criminally liable for Medicaid, Medicare or other insurance frauds. The government’s past practice of generally responding to larger health care providers’ health care violations via civil settlements may no longer be the norm. Therefore, training in compliance with applicable laws and regulations must be improved and increased, and all employees, from doctors to technicians, need to understand that participation in such government-sponsored and private insurance programs carries with it serious personal and individual risks.

In addition, providers must adopt a more alert and defensive state of mind regarding applicable legal requirements. Past assumptions that “lesser” violations were somehow acceptable because the government was likely to “forgive” them through a mild response must be abandoned. Gaining government forgiveness for violations will almost certainly be far more unlikely in the future.

Therefore, providers’ plans for responding to instances of alleged violations of applicable legal requirements or the initiation of government investigations should always presume a real risk of a criminal investigation.  Counsel with experience in responding to government investigations involving possible criminal violations should have a role in designing a provider’s response plan and employee training.

Finally, providers’ updated plans to address possible Medicaid, Medicare or other insurance violations and government investigations should identify the in-house people who will lead the response to government requests for information. Then if a full internal investigation is deemed warranted, engage counsel who have the experience and credibility to satisfy the DOJ’s current priorities, including possible criminal charges.