- Individual Prosecutions and Changes to the Yates Memo
Since the release of the DOJ’s Yates Memo, which outlined the DOJ’s goal of increasing individual accountability for corporate wrongdoing, there has been a clear trend of prosecuting individual wrongdoers in addition to their companies. The Yates Memo memorialized the DOJ’s belief that executives and senior corporate officers are in the best position to prevent fraud or remedy its consequences after discovery. Of the 165 health care fraud cases in 2018 listed on the website of the Office of Inspector General (OIG), there have been 131 cases in which individuals have been held personally liable for health care fraud, including owners, physicians, mid-level providers, and sales and marketing personnel, among others.
Of note, in United States v. Esformes, No. 16-cr-20549 (S.D. Fla.), a physician assistant charged in the largest criminal health fraud case ever brought against individuals by the DOJ recently pled guilty. The former physician’s assistant faces up to 10 years in prison after accepting responsibility for his part in a one-billion-dollar health care fraud scheme. The government had alleged that kickbacks were disguised as charitable donations and that sophisticated money-laundering techniques were used to conceal the scheme.
Deputy Attorney General Rod Rosenstein announced on November 29, 2018, that the DOJ would relax some policies related to when a corporation may receive cooperation credit. Under Yates, “[t]o be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.” The policy now requires that companies identify the individuals who were “substantially involved” in a potential crime. This is a small tweak, allowing for the DOJ and corporations to settle criminal allegations without the costly requirement of investigating each and every allegation. However, given the importance of health care compliance, providers should continue to emphasize the increased focus on individual conduct and potential liability during compliance training.
- Sales and Marketing Fraud
The government continues to focus its efforts on health care fraud involving sales and marketing practices—in particular, kickbacks paid by marketing personnel to referral sources. Problematic marketing practices, including joint marketing with physicians, led to several multimillion-dollar settlements in 2017 and have continued in 2018 as evidenced by several cases involving sales and marketing personnel. Providers should consider taking a fresh look at their marketing policies to ensure that they are consistent with recent best practices and do not permit conduct that has been the focus of recent investigations. Regular compliance training for sales and marketing personnel also is advisable.
- Opioid Abuse
The DOJ, the OIG, state attorneys general, insurance companies, and private litigants continue to investigate, prosecute, and litigate issues related to opioid diversion, fraud, and abuse. For example, on June 28, 2018, the DOJ announced that a nationwide health care fraud enforcement action resulted in the arrest of 160 individuals (including 76 physicians) for their roles in prescribing and distributing opioids and other dangerous narcotics. The OIG also issued a special report in July 2017 in which it highlighted questionable prescribing practices by physicians and other providers. Given the scope of the current opioid crisis, it is safe to assume that scrutiny of the prescribing, storing, and diversion of opioids will continue.
New strike forces in the Philadelphia and Appalachian regions have been created, and three high-profile cases in Georgia, Florida, and Massachusetts could be tried this year.
Health care providers should have processes in place related to the storage and dispensing of opioids, as well as a procedure for notifying the appropriate regulatory agencies in the event of a drug diversion incident. Practitioners should familiarize themselves with their individual state’s controlled substances prescription monitoring programs and how the database is being reviewed and used.
- Health Care Fraud Settlements Involving Employed Physicians
Over the past several years, there have been several investigations and settlements involving hospital-employed physicians. This had previously been considered an area of somewhat lower risk, given the relatively broad exception and safe harbor for employment arrangements under federal statutes that limit or prohibit certain physician self-referrals (Stark) and the anti-kickback statute. The recent settlements, which include a $14 million settlement from 2018, highlight the importance of fair market value in physician compensation, which is a requirement of the Stark bona fide employment relationships exception. Providers should ensure that employment arrangements with physicians and other referral sources are supported by fair market value documentation.
- Health Information Technology Compliance
During 2017 and 2018, we saw increased enforcement activities related to health care information technology. This included (i) a settlement involving an electronic health records vendor for $155 million to resolve allegations that it caused providers to violate the FCA related to meaningful use program payments; (ii) a $26 million settlement involving a medical group in which the group, among other things, allegedly falsely certified compliance with the meaningful use program; and (iii) a report released by the OIG indicating that the Centers for Medicare and Medicaid Services overpaid $729 million to physicians and other professionals who participated in the meaningful use programs. Providers who participated in the meaningful use program may want to consider conducting reviews of their past participation to ensure that they have all supporting documentation in the event of an audit or whistleblower lawsuit.
Conclusion
Given these trends, as well as other health care compliance trends not covered here, providers also may want to use the compliance program guidelines issued by the DOJ and OIG in 2017 as an efficient means to compare existing compliance programs against industry standards. The DOJ program guidance is contained in a document titled Evaluation of Corporate Compliance Programs, and the OIG compliance guidance can be found in a document titled Measuring Compliance Program Effectiveness: A Resource Guide.
Defending a health care litigation matter is costly and time consuming. A robust compliance program, together with active auditing and monitoring, can go a long way in avoiding trouble with these and other compliance issues.