2011 HEAT Provider Compliance Training - Health Care Fraud Enforcement Panel with Asst. US Attorney

Uploaded by OIGatHHS on 03.06.2011

>> Well, thank you everyone.
My name is John Pease and I'm the assistant US Attorney
from the US Attorney's Office in Philadelphia.
I'm gonna ask everyone to just bear with me for a second because asking a lawyer to talk
about any topic for 12 minutes is kind of like telling a food critic he can go
to the restaurant, barely allowed to read the menu.
So I'm gonna-- I'm gonna do the best I can but in all seriousness it's a real pleasure
and honor actually for me to be invited today to talk to you about health care fraud,
a subject that is of intense interest to me and really a great national interest as well.
And really there are three sort of takeaways I wanna try to get across to you
in my 12 minutes before I get yanked.
First that heath care fraud is a top priority of the Department of Justice
and US Attorney's Offices around the country.
Second, we are getting better at it every day and using better and more technology
and getting more resources to identify, detect and prevent health care fraud.
And then lastly, the last point I wanna get across with all of you is
that we are very interested in working more collaboratively with our counterparts
in private industry, especially in the compliance function.
I'm gonna give you two real world examples of how having an effective compliance program along
with making self disclosure resulted in tangible benefits to certain health care providers.
So let me-- let me start off also with just one more caveat.
The views I'm gonna express are not intended to represent those of the Department of Justice.
They're my own views.
I've been a federal prosecutor for 14 years, prosecuted every type of fraud case there is
with a special focus in the last couple of years on health care fraud.
Health care fraud is like any other type of fraud
that I've seen except there's really one thing about it I think
that makes it special, that makes it unique.
Everyone in this room has a stake in health care fraud and our health care fraud benefits.
Every one of us pays Medicare, wage taxes.
Every one of us knows somebody enrolled in the Medicare program.
Those who would steal from Medicare steal from our own pockets and put at risk the trust fund
that we hope some day will be there when we need it.
And so while there's many types of fraud cases, there really isn't one type of fraud
that I've seen that has a broader impact on our society, a bigger impact,
and that's a point I try to get across to federal judges at sentencing hearings
where we're dealing with somebody who commits fraud.
They're not just stealing from a nameless victim.
They're really stealing from all of us.
And in recognition to this, really in Philadelphia,
our US Attorney's Office has really been at the forefront nationally
in prosecting this war in healthcare fraud.
Our office has about 130 prosecutors and we have a special team, about 9 assistant US attorneys
who I supervise whose job it is to investigate, prosecute health care fraud.
But we don't do it alone.
If any of you ever watched Law & Order you'll see the police go out and catch these bad guys.
They turn them over to the prosecutor at the DA's office
and it's their job to prosecute and win the case.
It doesn't work that way at the US attorney's offices
and it doesn't work that way in health care fraud.
It takes a team of people to be able to bring these cases together.
Now we're here today at the US Department of Health and Human Services
and Nick DiGiulio was a valued partner and he
and I worked together in the Philadelphia region.
But there really is a tremendous interest among other federal law enforcement agencies
in prosecuting health care fraud.
The FBI in our region has a dedicated team of 15 agents who do nothing but health care fraud.
Food and Drug Administration has a team of 6 agents who work with us on health care fraud.
The US Postal Service, the Defense Criminal Investigative Service,
the Office of Personnel Management and a host of other federal agencies all are involved
with us working together investigating and prosecuting health care fraud.
We simply can't do it without those types of resources and we work these cases
from the ground up at the beginning of the case and we don't wait until the end
to decide whether or not a case has value or whether it has merit.
Now in Philadelphia, we've really been very fortunate.
We've, in the last year, received additional funding from the Department of Justice
to hire what's called a special focus team.
So with additional funds, we've been able to hire more criminal and civil prosecutors.
We've been able to hire two health care fraud auditors with more than 30
or 40 years experience in health care industry.
We recently brought on board an investigative analyst
who has 20 plus years of health care fraud experience.
We have a biostatistician, we have more support staff.
We've got a real strong commitment in Philadelphia and not just
in that office but really across the country.
Our office working collaboratively with the Department of Justice here
in Washington has made a real effort to do outreach to other US Attorney's Offices
across the country to combine our knowledge and share resources.
So I want you to know that in the Department of Justice, we are really working hard
to make the most and benefit from the experience and the knowledge we've gained
in these various health care fraud cases and we're communicating not just with each other
but with our partners at Health and Human Services and other agencies.
Now there's been some talk today about the use of data and I mentioned
in my initial remarks we're getting much better at using it.
And so in these cases, we're not just sitting back and waiting to get a tip on the tip line
or waiting for a whistleblower to file false claims act complaint.
We're trying to be a lot more proactive, and this is really where in part our efforts
to be more outreach with private industry come into place.
Our office, we don't just prosecute Medicare fraud, we prosecute all healthcare fraud.
So for example, Independence Blue Cross which is a major health insurer in Philadelphia,
has become a real partner of ours and they've been employing real sophisticated data mining
techniques and have made a number of referrals to our office
and we've taken those cases and ran with them.
In the last year alone, we prosecuted about off the top of my head I can think
of at least four chiropractors and a number of other health care practitioners whose billings
and claims histories and then internal audits that were done
by this health care insurer resulted in anomalies being identified
and resulted in fraudulent claims.
And we've taken those cases and we've run with them.
And doctors and other health care providers who defraud, some of the companies you work
for who defraud private insurers also are likely
to be defrauding the Medicare program and vice versa.
So I think all of us really have a stake in trying to root out, identify and prosecute some
of these unscrupulous individuals who engage in this health care fraud.
Now we've had really in the last year or two alone, there's a long list of physicians,
nurses, chiropractors, durable medical equipment company operators in our region
and really nationally who have been prosecuted.
And I could go through statistics and long list and, you know, your eyes might glaze over.
The real point I think I wanna really get to though is--
and I think maybe of real interest to some of you is how does a prosecutor
at the US Attorney's Office look into and try to make decisions
about what kinds of cases ought to be prosecuted.
You know, I think it's been mentioned in some
of the remarks this morning, we don't prosecute mistakes.
What we're looking for is knowing an intentional fraud, knowing intentional efforts to engage
in fraudulent practices that result in the payment of funds
that you wouldn't otherwise be entitled to.
But that's not the only factor.
We're also looking to things like the amount of the fraud loss.
Is this a case in which there is gonna be a deterrent effect.
We can't prosecute every case that comes into our office.
We look for cases where the conduct is serious.
We look for cases where the fraud loss is substantial enough that it's likely
to result in a potential prison term.
We wanna know how pervasive it was.
Is it a one time problem or is it conduct that occurred over a longer period of time?
We're interested in knowing in every case whether there had been any prior regulatory
actions against this health care provider or individual.
Has this person been counseled, for example, by a CMS contractor who went out and did an audit
and found problems sort of the example that Nick talked about a few minutes ago.
All these are sort of efforts along the way and most of today's discussion talks
about the administrative sanctions that may exist and regulatory compliance efforts.
I'm here today as sort of as an example of what happens to you if all those things fail
because at some point you have to go to jail.
Some of these individuals are not gonna be deterred by the threat of sanctions,
by the threat of having payments or monetary penalties imposed.
There are some individuals and we all know that it's true and who have to be prosecuted.
And the only real deterrent in these cases is gonna be prison.
And so, we're looking in prosecuting individual cases and asking ourselves is this a kind
of case that other physicians, other health care providers are gonna look at
and essentially put on the brakes.
You know, we'll never know and as prosecutors we always talk about this
and judges always ask questions about this.
If I impose a sentence you are asking for, Mr. Pease, if I give more time to any individual,
you know, how am I to know that's gonna have an effect on someone else?
And the answer is we'll never know how many individuals out there did not commit fraud
as a result of any one individual prosecution.
But what we do know is that there's no shortage of new cases that come in.
And so, we have to be vigorous and we have to find it and identify
and prosecute it and prosecute it vigorously.
Now, other issues that, you know, we talk about a little bit before,
in the case of a criminal matter for example, one of the things that we generally don't get
into in prosecuting is a debate over medical judgment.
The use of a-- the administer-- administration of any particular service,
if there is a reasonable debate among physicians about whether it's medically necessary,
that ordinarily doesn't lend itself into a criminal case.
Much of what we see and what's been prosecuted in our office are the traditional sort of bread
and butter fraudulent billing schemes, physicians who are billing
as if they saw a patient in the office when they're actually in California
or in Las Vegas or-- and that we have plenty of examples
that I'm gonna give you a couple of examples as well.
But in terms of sort of every one here in the room and who's watching the broadcast, you know,
one of the most important factors as prosecutors that we're directed to look
at in our prosecution guidelines especially for organizations is first
of all did the organization have a compliance program.
>> What type of compliance program was it and was it a paper program
or was it one that had real teeth?
Was it actually a program where people understood and knew what the rules were
and were expected to follow them?
Was there accountability in this program?
Was there an oversight function?
These are very important factors that we look at in deciding whether an organization itself ought
to be the target and defend it in a criminal case.
It's not the only factor that we look at.
There are other issues as well.
No company has a perfect compliance program.
If that were the case, we probably wouldn't be talking to them about what happened
or what went wrong in any particular case.
But it is very important in understanding and identifying criminal conduct to figure
out how it happened, how they were able to escape
or work through whatever compliance function existed.
And if it was caught or detected, was anything done about it or did some compliance person
or did someone in management who was alerted to the possibility of some problem follow up on
or take action or was the compliance function treated sort of as an unwanted interference
or sometimes I like to refer to it as the sales prevention department.
Is this a kind-- is this the kind of organization we're talking about?
Are we talking about an organization with a robust compliance program?
I wanted to-- I'm gonna give you just, you know, a couple of examples of some fraudulent cases
that we prosecuted and I wanna give you two cases that we didn't prosecute
in significant part because of the role
that a compliance program played in that particular case.
One is a case involving a Dr. Ronald Bailey.
He was a behavioral specialist consultant.
He was recently sentenced to prison in Philadelphia.
And Dr. Bailey was an independent contractor for two nonprofit organizations
in Southeastern Pennsylvania that receive Medicaid funds.
And he's job was to provide counseling services primarily to autistic children and he was paid
on a-- 45 dollars an hour was his rate.
And so he was required to submit timecards and summarizing, you know, the hours.
Well, unfortunately, Dr. Bailey submitted to each agency that he worked for timecards
that overstated the amount of hours he was spending counseling children and families.
And so this went on for quite some time and one of the--
and in these agencies, they began to review his billings and then realized
that he was working two separate places and these two compliance folks communicated
with each other and recognized that because he was working two different places they wanted
to take a further look into a possibility there might be some issue.
And so the compliance function examined and sort of shared information,
cross referenced his billing and what do you know, Dr. Bailey claimed to be
at two different places at the exact same time counseling two different children.
So they did a full blown audit, analyzed and assessed what they thought the over payment was
and the loss to the Medicaid program.
They hired outside counsel who called me and we-- I called HHS.
We did an investigation along with our partners
at the state attorney general's Medicaid Fraud Control Unit
and quickly brought the case to a resolution.
Dr. Bailey pled guilty.
Each of these two agencies made the Medicare program whole, repaid the money
and neither one of them was prosecuted.
In theory, as a technical matter, they could have been prosecuted.
They're liable for the false billings, the fraudulent conduct.
But because they made proactive steps, they didn't just ignore it.
When they came across a problem they made a referral and a self disclosure.
That was an important factor in that case in deciding what to do.
Another case, it's an ongoing case in Philadelphia.
A physician, an ophthalmologist was charged in a 144-count indictment with health care fraud
and making false statements and medical records.
In that case, the compliance department of this health system did an internal audit,
analyzed his billings, had a team of auditors working and discovered that this physician,
while claiming to be at the hospital seeing patients, was actually either on leave
or at CME conferences on the other side of the country
or in a different office as part of this health system.
They made a referral to HHS and to the US Attorney's Office.
We did a thorough investigation and looked into the conduct and made a decision
that we would only charge the physician and would not charge this health system,
this health care provider with any criminal activity.
Does that mean you don't have to pay the money back?
Of course not, they're gonna have to repay the money.
They're working on a false claims act settlement with our civil division.
But at-- you're in a much better position I think dealing with the civil
and administrative side, then you wanna be in the criminal side.
And with the criminal side, it's just not just the issue of a financial conviction,
you got to be concerned about there are all these collateral consequences.
Obviously, we can't put companies in jail but we do prosecute them
and one of the reasons we prosecute corporations is to send a message of deterrence.
And in certain cases where the conduct rises to a pervasiveness
and a level involving a significant manager or operator of one of these organizations,
just prosecuting the individuals isn't enough.
And another reason we'll do it is because of the administrative sanctions.
I mean you've heard a lot today about the exclusion authority and companies
and entities just like individuals convicted of health care fraud can be excluded
and there are times and appropriate places when that should happen.
And that is a serious, a serious potential risk and consequence for any health care provider
in terms of deciding whether you're gonna have a compliance program and then secondly,
how rigorous and robust it's gonna be.
So, you don't wanna wait until you find out or learn about someone in your organization,
some provider that you're dealing with engaging in fraud.
You wanna think at some of the terrific panels I've talked about today,
what does my compliance program look like?
What's a federal prosecutor gonna think about it 2 years from now after agents show up
and do a search warrant and have one of our doctors and one of our nurses
in the crosshairs of a criminal case?
What is-- what are the-- what's the Department of Justice, what's a prosecutor gonna think
when they begin talking to my compliance director,
when they begin asking whether we have auditors who went out
and did on their own audits to look into billing anomalies?
You know, were there red flags along the way that were, you know,
not going to be followed up on or that were ignored.
Because in very one of these cases, those are the kinds
of things the prosecutors are gonna look for.
They're not just gonna think, alright, we've charged the nurse,
we've charged the doctor, our job is done.
In any of these cases with limited resources that we have,
we want to send a sign of deterrence.
We want to identify all the wrongful conduct.
And not just that, we want to figure out how it happened and why it happened.
And so, you know, those are some of the most significant factors.
I mentioned the third point and I wanted to talk about briefly,
and that is reaching out to all of you.
I'm happy to talk with any of you about what we're doing
and encourage you to reach out to us at any time.
I'm getting a threat of exclusion by one of our distinguished guests.
So, before I'm excluded I will end my remarks and thank you very much.
[ Laughter ]