Ileana Hernandez of Manatt, Phelps & Phillips Law Firm spoke with us about the evolution of health care fraud. Hernandez provided insight on how she thinks health care fraud has changed over time and her opinions about what might be next for the prevention of these types of crimes.
Is Healthcare Fraud Changing?
Hernandez noted that fraud investigations have been “rampant” over the past few years, as more companies are targeted by the Department of Justice and other governmental agencies. She added, “That is a big change because health care fraud historically has been very much an individual-based area of the law – a provider who is billing for services that never happened or a doctor who is trading prescriptions. We’ve seen a lot more criminal enforcement since 2007, and that’s an interesting change. The government is changing its focus to organized crime, which has largely been driven by the Affordable Care Act (ACA). This is not an area where you will typically see large companies targeted on a regular basis – pharma certainly not, insurance most definitely not – but we have seen a big influx of enforcement actions against what you would traditionally see as very large publicly traded companies.”
Hernandez added that larger, publicly traded companies have been targeted because of the sheer size of their operations and the extensive record-keeping requirements by federal and state agencies with oversight over these types of agencies. In addition, she noted that some of the largest healthcare fraud settlements in history have come from some of these major companies.
Hernandez also pointed out that the investigation of large companies like these is different than the investigations into smaller providers. She said, “I think it’s just a matter of scale and volume – or at least that’s how I explain it to my clients. The government looks for patterns in billing practices because they can see very quickly when someone is billing for services that are not medically necessary or never happened. The government also has experts in audits and forensic accounting who know how to look at the data, so if you’re a company with thousands of providers entering data into your systems, it’s easier for them to spot anomalies throughout. If there are doctors billing for services that don’t exist or prescriptions being written outside the normal course of medical billing, it will be exposed quickly. Of course, there are always going to be a few bad apples in every industry, but when you have a high volume of providers doing things they shouldn’t be doing and a company that is not keeping up, that’s when you see problems.”
Hernandez also pointed out that these investigations are happening across the entire country, not just in one region, and frequently involve more than one insurance carrier. She noted that California is currently leading the charge in terms of states with the most health care fraud investigations right now, but all carriers are on high alert.