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Article Published by Health Care Fraud defense attorney Andrew Feldman

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Health Care Fraud defense attorney, Andrew S. Feldman, published an article in the ABA Health Law’s monthly E-Source publication, A Cardiologist’s Recent Acquittal Should Send a Message With Respect to Future Medical Necessity Prosecutions. A link to the article is included here.

 

As reinforced throughout the article, the Government prosecuted a cardiologist for health care fraud related to a cardiologist’s decision to place heart stents in particular patients suffering from coronary heart disease. In such cases, a vigorous Health Care Fraud defense is critical. Indeed, the Government, in general, has increased the quantity and scope of medical necessity prosecutions. Simply put, a medical necessity prosecution is, simply put, a prosecution based on the theory that the service provided by the individual health care provider or physician (e.g. cardiologist, dermatologist, urologist, dentist, or spinal surgeon) was medically unnecessary. Whether or not a service or good is reasonable and necessary dictates whether the Government or a commercial payor will pay the physician’s tab. What the Government is saying is that you submitted your bill but we do not think we should pay because you are asking us to pay for services you say you performed but which we claim are unnecessary.

 

This is nothing new. What is new are prosecutions like the prosecution against Dr. Richard Paulus. A prosecution that, candidly, should have been declined at the investigative phase but instead prosecutors doubled down with a False Claims Act prosecution without a whistleblower on the exact same facts. The centerpiece of the Paulus indictment was that Dr. Paulus had performed cardiac stent procedures which were unnecessary to justify billing for these expensive cardiac procedures. In civil and criminal health care fraud land though, there must be a lie. What was the lie? According to the Government, it was the amount of blockage – the degree to which a heart valve is blocked and cannot circulate blood to the rest of the body – recorded by Dr. Paulus after his interpretation of patient angiograms.  One problem (and there were a few) with that theory in Paulus’ case was that “expert” opinions on the degree and percentage of that blockage were all over the map – 20%, 40%, 70%, 80%. The Government experts also disagreed with one another on this critical issue.  There was no clear financial motive, there was no evidence of destroying or concealing evidence, there was no evidence that Dr. Paulus recorded or directed others to record false patient symptoms to justify any of the cardiac stents. As the district court underscored in the Order entering a judgment of acquittal following trial – the health care fraud statute is “not intended to penalize a person who exercises a health care treatment choice or makes a medical or health care judgment in good faith simply because there is a difference of opinion regarding the form of diagnosis or treatment.” 

 

Hiring a Health Care Fraud defense attorney is an important decision. The Feldman Firm would welcome the opportunity to assist you if you are under investigation for or if you have been accused of a health care fraud offense. 

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Government Continues to Investigate Laboratories for Violations of Anti Kickback Statute

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The Government continues to aggressively investigate whether laboratories have engaged in violations of the anti kickback statute. 

A few weeks ago, the FBI raided Proove Laboratories, a laboratory in Southern California, specializing in genetic testing to determine a patient’s likelihood of becoming addicted to opioids, based on genetic tests and questionnaires. The FBI also raided offices of doctors in Kentucky, Florida, and California whom had enrolled patients in Proove’s genetic testing studiesThe genetic testing was used to determine whether a patient may be predisposed to certain drugs, including opioids. Testing is also designed to identify the best pain medication possible for the patient based on their genome. Proove also claimed that testing was peer-reviewed and resulted in significant relief for a high percentage of its patients.

Reports indicate that the raid of Proove was triggered, in part, by Proove’s patient registry. According to another article, Proove maintained patient engagement representatives on site including at Benefis Pain Management Center in Montana.  Benefis was previously connected to Confirmatrix, a laboratory run by a convicted felon in Georgia, after the FBI raided Confirmatrix. Confirmatrix was receiving urine tests from patients at Benefis and Confirmatrix (prior to its filing for Chapter 11 bankruptcy) was believed to receive the highest Medicare reimbursements per urine test of any lab in the United States.

An internal legal memorandum from Proove’s counsel has also surfaced. The Memorandum discusses why, according to internal counsel, the lab’s compensation arrangement with physicians does not violate the anti kickback statute or implicate any of the concerns from an OIG Special Fraud Alert Bulletin in 2014  discussing the application of the anti kickback statute and the uptick in fraud with respect to patient registries and enrollment in clinical studies.

Several things are significant here:

Advice of Counsel Defense: Proove seems to have set the stage for an advice of counsel defense to any accusation that they violated the anti kickback statute or other health care fraud and abuse laws. Advice of counsel defenses have become increasingly common as a weapon of choice for defense attorneys with clients facing accusations that that violated the anti kickback statute.

Focus on Laboratories: OIG and FBI continue to focus on laboratories, whether the purpose of the testing is to detect cardiovascular disease, accurately prescribe medication (pharmacogenetics), deter relapse through urinalysis testing, or to accurately prescribe pain medications that do not pose a heightened risk of addiction to the patient. The Government is also focusing on relationships and compensation arrangements they believe might run afoul of the anti kickback statute, including, but not limited to, physician relationships with laboratories, relationships between marketers and laboratories, medical directorships with laboratories, and laboratory relationships with substance abuse and drug treatment centers.

Marketing: The Government has continued to increase investigations and prosecutions related to unlawful sales and marketing arrangements. While it is far too premature to predict, the Government may take the position that the “patient engagement representatives” were improperly recruiting patients for expensive laboratory testing in violation of the anti kickback statute and claim that the literature supporting the tests and their efficacy was, at best, questionable. The Government has already taken similar positions in compounding pharmacy investigations and prosecutions related to sales and marketing arrangements. In those cases, Tricare, through its Pharmacy Benefits Manager (PBM), Express Scripts, was reimbursing providers for pain creams, scar creams, and anti-wrinkle creams at “astronomical” rates from 2012 until May of 2015 when Tricare and Express Scripts revamped the pre-screening rules and requirements for submitting claims for compounded medications.

Opioid Epidemic: The opioid epidemic has gained national attention. Florida even has declared it an emergency. Thus, it is reasonably foreseeable that the Government will continue to target laboratories and health care providers that prescribe, dispense, market, manufacture, and distribute opioids.  Similarly, the Government and Florida will continue to ramp up efforts to combat perceived widespread corruption related to the treatment of persons addicted to opioids – whether it be sober homes, substance abuse treatment centers, recover residences, or laboratories.

The jury is still out on whether the Government will adopt a measured approach to the opioid epidemic which balances the needs of patients experiencing real pain and addicts whom, in some cases, might require medication assisted treatment, with the need to combat fraud and abuse and the pharmaceutical diversion which compromises patient safety.

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Health Care Fraud and Abuse Medicare Fraud Strike Force

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The Medicare Fraud Strike Force shattered its record last year with 300 arrests in 2 days. Whether you are a doctor receiving a target letter, a compounding pharmacy receiving a grand jury subpoena, or a laboratory receiving a civil investigative demand, the Firm will strive to mitigate the damage from any investigation, and where necessary, will battle in court.

It is now an annual summer tradition that the Department of Justice (DOJ), through its Medicare Fraud Strike Force, which was established in 2007 and is composed of various federal, state, and local law enforcement agencies (e.g., OIG-HHS, DEA, FBI, Medicaid Fraud Control Units) will arrest various persons for alleged health care fraud and abuse. The Strike Force currently operates in 9 locations: Miami, Tampa, Brooklyn, Detroit, Los Angeles, Dallas, Southern Texas, Southern Louisiana, and Chicago.

DOJ appears to be focused on drug rehabilitation and substance abuse centers, laboratories, hospice providers, assisted living facilities (ALFs), home health agencies, and compounding pharmacies.

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Medicare Fraud Strike Force 2017

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The Medicare Fraud Strike Force annual take down seems imminent. I devote a large portion of my practice to assisting health care providers, pharmacies, and sales and marketing professionals in civil and criminal investigations relating to health care fraud and abuse, violations of the federal Anti-Kickback Statute, and drug diversion.

 

Since 2007 it has been an annual summer tradition that the Department of Justice, through its Strike Force, which is composed of various federal, state, and local law enforcement agencies (e.g., OIG-HHS, DEA, FBI, Medicaid Fraud Control Units) will arrest various persons for alleged health care fraud and abuse in HEAT cities (Miami, Tampa, Brooklyn, Detroit, Los Angeles, Dallas, Southern Texas, Southern Louisiana, and Chicago). DOJ appears to be focused on drug rehabilitation centers and sober homes, laboratories, hospice providers, assisted living facilities (ALFs), home health agencies, and compounding and/or specialty pharmacies. Based on the timing of previous take-downs, it is anticipated that this annual summer “take-down” might happen soon. During this time, if government agents arrest, detain, or seek to question a specific individual, it is absolutely critical that the person retain adequate and competent counsel.

 

In the past, Medicare Fraud Strike Force has arrested dozens, if not hundreds of persons, in the span of a few days in the HEAT cities mentioned above. The Medicare Fraud Strike Force is an essential component of the Department of Justice’s efforts to combat Medicare fraud.  Last year in 2016 many of the arrests were targeted at home health agencies, pharmacies, and individual physicians. This year it would not be surprising to see additional arrests by the Medicare Fraud Strike Force involving those same entities. Yet, it appears that the Medicare Fraud Strike Force is also seriously considering laboratories, drug rehabilitation and substance abuse treatment centers, compounding pharmacies, hospice providers, assisted living facilities, and others.

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Another Close Call in A False Claims Act Case

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This appears to be another close call — submitting claims for controlled substances that were never dispensed. I wonder if this had been in another district whether it would have landed comfortably in civil False Claims Act land.

https://www.justice.gov/usao-sdga/pr/dodge-county-pharmacy-and-pharmacist-agree-pay-over-2-million-resolve-false-claims-act

The harsh reality is that geography matters. DOJ does not appear to have any real criterion for determining when a criminal AUSA must be assigned to a case involving suspected health care fraud and abuse. Sure, there are guidelines – like cash kickbacks and patient harm normally fall into the purview of criminal versus civil. Yet, even those guidelines are, yes, guidelines. Cases in point: the dozens of worthless services fraud cases that are non-criminal cases involving graphic allegations of patient harm (sometimes even patient deaths) which are not assigned to any criminal AUSA. Normally, supervision and questionable AKS safe harbor cases fall into the civil bucket. Not always. There are criminal cases where lack of supervision is the core theory of the criminal prosecution. Similarly, there are criminal cases where the theory is, in part, based on conduct which purportedly violates AKS and falls outside of any applicable statutory exception or safe harbor. There should be greater uniformity and an ongoing dialogue on how such uniformity might be achieved from the top down.