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Lawyer: Fraud crackdown on physicians ramping up, so be prepared

The healthcare industry is now getting the scrutiny that financial institutions and other publicly traded companies have experienced.

Susan Morse, Senior Editor

The healthcare industry is now getting the scrutiny that financial institutions and other publicly traded companies have experienced, said Phil Bezanson, a partner at Bracewell & Giuliani in Houston.The healthcare industry is now getting the scrutiny that financial institutions and other publicly traded companies have experienced, said Phil Bezanson, a partner at Bracewell & Giuliani in Houston.

With federal investigators planning to crack down on Medicare fraud among smaller providers and physician practices, the healthcare industry is now getting the scrutiny that financial institutions and other publicly traded companies have experienced, said Phil Bezanson, a partner at Bracewell & Giuliani in Seattle.

"It wouldn't surprise me at all if regulators looking at healthcare are trying to replicate that approach to collect a lot of data and run the data through comparative analysis to look at anomalies, he said. "A couple of things have come out in last two weeks that have been really interesting to giving us a view at least of the Department of Justice and regulators as they set out their agenda for healthcare-related investigations."

One example has been the recent highly publicized, coordinated arrests of over 240 doctors, nurses and other licensed medical professionals in a $700 million healthcare fraud sweep focusing on alleged Medicare Part D fraud.

[Also: 243 healthcare professionals accused in $712 million 'biggest ever' fraud takedown]

Medicare Part D has provided more than $400 billion to recipients of the program, and is the fastest growing component of Medicare. "That was very much a shot across the bow," said Bezanson, whose firm does defense work in healthcare fraud cases.

Also, on June 30, the Office of Inspector General announced a new civil litigation team of 10 to 12 attorneys dedicated to combating fraud who will focus on individual physicians and provider executives.

The OIG previously concentrated more on the bigger organizations instead of than these smaller entities.

"It may be a little bit more difficult to ferret out wrongdoing, but the government is committed to doing it," said Bezanson.

[Also: Running list of notable 2015 healthcare frauds]

Also in June, the Centers for Medicare and Medicaid Services recommended new standardized data reporting.

Bezanson's firm works with the larger providers on how to anticipate and mitigate the high cost of government investigation. The larger hospitals have internal controls and procedures in place, he said.

The new focus on the solo practitioner and small practice groups means these practices will have to identify and fund best practices to prepare for a potential investigation.

Bezanson recommends that practices take a look at billing practices, procedures and test recommendations to the extent they are written down. They should also set up internal guidelines for consistency within a group practice.

"That can send a strong message to regulators," said Bezanson.

Most large providers are used to dealing with the risk of fraud and already have internal controls and compliance plans in place, according to Bezanson and Verisk Health Chief Medical Officer Richard Wheeler, a family physician who has practiced 25 years at Kaiser and Duke in North Carolina and worked as a medical director for Blue Cross Blue Shield in the fraud unit.

"Providers have been made more and more aware of the crackdown on fraud over the past decade," Wheeler said. "It's escalated over the past two to three years. I'm not convinced these big cases mean as much to big providers, they're usually clear of fraud. It's the smaller groups where there will be the bigger impact."

The announcement also means the Department of Justice may be more open to looking at cases dealing with the more subtle issue of "honest fraud," whether a procedure is one of medical necessity, according to Wheeler.

Twitter: @SusanMorseHFN

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