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Sessions Announces Formation of Opioid Fraud Unit

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Formation of Opioid Fraud and Abuse Unit

Opioid fraud and abuse is rampant. Yet, the epidemic demands a collaborative solution fashioned by regulators, medical professionals, professional boards, Congress, U.S. Attorney’s offices, and law enforcement.

As part of these efforts to address the epidemic, Attorney General Jeff Sessions announced the formation of a new Opioid Fraud and Abuse Detection Unit, yesterday to help battle the opioid crisis. As part of the new Unit, prosecutors will be deployed for a 3 year term to specific Districts including:

  1. Middle District of Florida,
  2. Eastern District of Michigan,
  3. Northern District of Alabama,
  4. Eastern District of Tennessee,
  5. District of Nevada,
  6. Eastern District of Kentucky,
  7. District of Maryland,
  8. Western District of Pennsylvania,
  9. Southern District of Ohio,
  10. Eastern District of California,
  11. Middle District of North Carolina, and
  12. Southern District of West Virginia.

Recent Cases

Sessions is not messing around. More and more health care fraud prosecutions and investigations are also targeting health care providers, pharmacies, pharmacists, and sales and marketing professionals related to the prescription, dispensing, or marketing of opioids.

During the 2017 national health care fraud takedown, in Houston, a doctor and clinic owner were accused of a conspiracy to distribute and dispense controlled substances in connection with a purported pain management clinic that is alleged to have been the highest prescribing hydrocodone clinic in Houston, where approximately 60-70 people were seen daily, and were issued medically unnecessary prescriptions for hydrocodone in exchange for approximately $300 cash per visit. In Iowa, 5 individuals in were arrested for distribution of opioids, and in Tennessee, three defendants were charged in a scheme involving fraudulent billings and the distribution of opioids.

In the last year, federal prosecutors in Boston, Miami, and New York obtained indictments against pharmaceutical sales representatives alleging that they received and paid kickbacks in connection with speaker programs promoting Fetanyl sprays (an opioid).

Further, this does not include any of the dozens of compounding pharmacy fraud investigations and prosecutions involving the prescription and dispensing of pain creams containing controlled substances, for example, ketamine.

Unit Driven by Data

What is also interesting about the new Unit is that investigations will rely heavily on data:

“I am announcing a new data analytics program – the Opioid Fraud and Abuse Detection Unit. I have created this unit to focus specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to this opioid epidemic. This sort of data analytics team can tell us important information about prescription opioids—like (1) which physicians are writing opioid prescriptions at a rate that far exceeds their peers; (2) how many of a doctor’s patients died within 60 days of an opioid prescription; (3) the average age of the patients receiving these prescriptions; (4) pharmacies that are dispensing disproportionately large amounts of opioids; and (5) regional hot spots for opioid issues.

Indeed, the Government’s use of data mining has become an indispensable part of its effort to combat health care fraud and drug diversion. Data never tells the whole story though. As an example, a patient may have died within 60 days of a prescription for an opioid from Doctor X but that same patient may have procured diverted opioids on the black market and overdosed. Item (4) will also require a geographical comparison of Pharmacy X to other pharmacies in that area. Who decides what is “disproportionate” though? Another metric, which the Unit will likely incorporate, might be the rate of out of state patients procuring prescriptions from Doctor X and/or the rate of out of prescriptions dispensed by Pharmacy X to out of state patients.

Pre-Trial Diversion Eligibility for Addicts Requiring Recovery and Treatment

It would be a step in the right direction if US Attorney’s Offices in these high volume opioid districts also treated addicts found in possession of opioids with a degree of leniency and offered pre-trial diversion programs contingent on completion of drug recovery programs. Such diversion programs are much more common in state courts but in the District of New Hampshire, for example, which is not included on this list, Oxycontin addicts are potentially eligible for pre-trial diversion. If Sessions really wants to take the lead on this issue, there must be a level of compassion afforded to true addicts. Imprisonment is not the answer.

Pharmacies, Clinics, DEA Registrants, Pain Management Physicians, and Sales and Marketing Professionals

If you regularly prescribe, dispense, or promote medications containing opioids – especially in one of the geographic areas listed as a hot spot region –you should be aware of the formation of Sessions’ new Unit and should take steps to reevaluate and reassess internal controls, auditing, and compliance functions.

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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.