Dealing with Fraud
Vianny Castillo
David.Tataw, PhD, MPA, MMIS, FACHE
Health Care Policy, Law, and Ethics (HAS 515)
September 6, 2013

Introduction
Fraud is defined as wrongful or criminal deception intended to result in financial or personal gain. The term is usually associated with financial institutions or perhaps other types of businesses, but it’s not a term that is automatically associated with the health care field. Or at least some of us didn’t think so. However, the sad truth is that health care fraud costs the country an estimated $80 billion a year. It is a rising threat, with national health care spending rising to $2.7 trillion and expenses continuing to outpace inflation. The saddest element of this situation is that recent cases have shown that medical professionals are more willing to risk patient harm in pursuit of successfully executing their schemes.
Health Care fraud is in the jurisdiction of the FBI. They are the primary agency responsible for investigating these types of cases, and also for exposing them. They are responsible for the federal and private insurance programs.
As the Chief Medical Officer of a large Obstetrics Health Care Center, I am sadden and extremely angry to learn that these types of fraudulent activities are associated with my facility. As I investigate and learn more about the situation, I will also be exploring other topics as listed below. 1. Evaluate how the Healthcare Qui Tam affects health care organizations. 2. Provide four (4) examples of Qui Tam cases that exist in a variety of health care organizations. 3. Devise a procedure for admission into a health care facility that upholds the law about the required number of Medicare and Medicaid referrals. 4. Recommend a corporate integrity program that will mitigate incidents of fraud and assess how the recommendation will impact issues of reproduction and birth. 5. Devise a plan to protect patient information that complies with all necessary laws.
Health Care Qui Tam
Qui Tam is a lawsuit brought by a private citizen (a relator, whistle-blower, or private attorney general), on behalf of the government as well as himself, against a defendant who may have committed fraud or criminal acts in which the government was victimized. The government may intervene in a qui tam action to take over prosecution of the case, but the plaintiff is entitled to a percentage of the recovery of any damages awarded. (Showater. 2012).
The False Claims Act allows people who are not affiliated with the government to file actions against federal contractors claiming fraud against the government. This more commonly known as "whistleblowing". The Act can be seen as a tool to attempt to prevent fraudulent billings turned in to the Federal Government. Previous claims under this law have been filed by individuals with insider knowledge of false claims which have typically involved health care, military, or other government spending programs. Some of those claims consisted of billing for ghost patients, up coding, unbundling, and billing for inadequate or unnecessary care.
The provision allows a private person, also known as a "relator," to bring a lawsuit on behalf of the United States, where the private detective or other person has information that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The relator need not have been personally harmed by the defendant's conduct. According to the New England Journal of Medicine on 5/13/10, 90 percent of health care fraud cases are currently qui tam actions initiated by whistleblowers on behalf of the government. Under the FCA, whistleblowers, also known as relators, are eligible to receive 15 to 25 percent of the recovery.

So now that we have an understanding of what Qui Tam is, how does it affect health care organizations? The most obvious way that Qui Tam affects health care organizations is by allowing any individual that may have information regarding violations by any organization to be able to file a suit. This means that organizations must take precautions to ensure that there are not illegal activities going on within their organizations. They never know who can be that one individual that would report it and bring about an investigation and lawsuit. There is much to lose.
Qui Tam Cases
There are so many cases of Qui Tam in health care. Since 1988, nearly $2 billion has been recovered from health care providers and others who have cheated government health programs. In the battle against health care fraud, law enforcement agencies consider these types of claims to be the most powerful weapon.
In September 2009, the Federal Government announced the largest recovery ever in a qui tam case. The case was against Pfizer, Inc. and worth over $2 Billion Dollars. John Kopchinski is West Point graduate, and a Golf War veteran. He explained that at Pfizer he was expected to increase profits at all costs, even when sales meant endangering lives. This he could not do, especially when his mission for years in the Army was to protect lives at all cost. This is why he made the decision to file the Qui Tam lawsuit. The FDA approved Bextra to treat arthritis as well as menstrual pain in very limited doses. Mr. Kopchinski alleged in his lawsuit, which the government joined - that Pfizer promoted Bextra for uses and in doses that far exceeded what the FDA had approved. This put patients at risk for serious health problems such as heart attack, stroke and pulmonary embolism. The lawsuit also alleged that Bextra paid doctors kickbacks in various ways to influence them to prescribe and endorse Bextra for those unapproved uses. Bextra was withdrawn from the market in 2005. The federal government will award Mr. Kopchinski $51.5 million as a reward for the work he and his attorneys did on the case.
In 1992, the United States began to suspect that SmithKline Beecham Clinical Laboratories and several other medical laboratories had adopted the following scheme that allowed them to bill the federal government for unauthorized and unnecessary laboratory tests. The laboratories had “bundled” a standard grouping of blood tests with some additional tests and had then marketed this grouping to doctors by leading them to believe that the additional tests would not increase costs to Medicare and other government-sponsored health programs. After the tests were ordered, the laboratories “unbundled” the additional tests from the standard grouping for purposes of billing. In many instances, treating physicians had made no determination that the additional tests were medically necessary for the diagnosis or treatment of patients; instead, the physicians had ordered the tests solely because they were sold as a package with other tests that they had deemed necessary. As a result, the laboratories submitted bills and received payment for tests that were medically unnecessary. Robert Merena, an employee of SmithKline, filed a Qui Tam action against SmithKline. His complaint contained eight separate claims under the False Claims Act. It alleged that the laboratory had defrauded the government by billing for tests that were not performed, double billing, paying illegal kickbacks to health care professionals, and adding tests to “automated chemistry” profiles and then separately billing for those tests. SmithKline paid $325 million in February 1997 to settle the three qui tam lawsuits that charged the company had defrauded Medicare and other government health insurance programs through its billing practices. Mr. Merena along with the 5 other realtors shared a total of $53.75 million.
Amgen, Inc. has agreed to pay $762 million in criminal and civil fines, penalties and damages to settle allegations that the company willfully defrauded Medicare, Medicaid, and other government funded health care programs in connection with its promotion of its multi-billion dollar drug Aranesp. Like Pfizer did with their drug, the off-label uses, including Anemia of Cancer, which endangered the lives of patients across the country, among other allegations were the reason for the lawsuit. Whistleblower Jill Osiecki, filed the Qui Tam action against Amgen.
Drug maker Eli Lilly pleaded guilty to promoting its drug Zyprexa for uses not approved by the Food and Drug Administration. Included is a criminal fine of $515 million, the largest ever in a health care case, and the largest criminal fine for an individual corporation ever imposed in a United States criminal prosecution of any kind. Eli Lilly will also pay up to $800 million in a civil settlement with the federal government and the states. Whistleblowers will share in about 20% of the government's share.
Procedure for admission
The Stark Law was enacted to prevent physician self-referrals, specifically this means the referral of patients for designated health services that may be paid for by Medicare, Medicaid, or other state healthcare plans to any entity with which the referring physician has a financial interest or relationship. A violation of the Stark Law results in an overpayment, even if a party does not intend to engage in unlawful conduct. Both the Stark Law and the Anti-Kickback statue are intended to prevent healthcare providers from taking actions for the purpose of financial benefit to themselves instead of for the patient’s benefit.
We need to ensure that all our employees, from physicians to office staff understand this law and the consequences associated with it. It is necessary to administer annual compliance testing of all staff to keep everyone current with all the changes in the field that can affect the group in relation to these types of violations.
Corporate Integrity
People make mistakes, we’re all human after all. I believe that constant education is crucial in a field that is ever changing. Regulation, statues, and laws are in constant shifting. Keeping everyone informed on the latest information is a must. This will help mitigate all types of incidents, not just fraud.
We’ll develop internal controls that promote adherence to federal and state laws and the program requirements of federal, state, and private health plans. Having a Corporate Compliance Program (CCP) was until not too long ago recommendation and voluntary. However, the health reform laws have made them mandatory for “providers of services and suppliers” under Medicare, Medicaid, and CHIP. All hospitals, nursing homes, rehabilitation facilities,
Hospice programs, home health agencies, and other healthcare facilities; drug and device manufacturers; and physicians and other practitioners must have a CCP in place if they wish to participate in federally funded health insurance programs. (Showater 2012).
Our facility is completely committed to ensuring that we are conducting business ethically and in compliance with all laws and regulations. As a result we have created a formal Corporate Integrity Program (CIP). The program brings together the compliance efforts of all departments and reports regularly to the appropriate parties within the organization. The effectiveness or lack thereof will be reported to senior leadership regularly. I have learned that it is human nature to forget something that is not constantly being monitored. The program provides a formal process for preventing, detecting or correcting any instances of noncompliance. It also aids the organization by ensuring that updates and changes in laws, rules and regulations are promptly communicated to appropriate departments.
We want to always be a leader in the community and maintain the respect from around the industry. As a result, we will be committed to creating an atmosphere of excellence by encouraging all employees to actively participate in accomplishing effective organizational compliance. We set this standard in order to benefit its employees and the community in which we serve.
HIPAA
The Health Insurance Portability and Accountability Act of 1996, better known as HIPAA is a government legislation that ensures a person's right to buy health insurance after losing a job, establishes standards for electronic medical records, and protects the privacy of a patient's health information. It is imperative that all that treat patients or are involved in the treatment of patients understands this law and does everything they can to abide this law. Failure to do so can be extremely costly and detrimental to the business’s wellbeing.
The goals of the HIPAA Compliance Program are 1) to provide guidance on the requirements of the Health Insurance Portability and Accountability Act of 1996 so that we can maintain compliance with the Act, 2) to provide affected staff with the education and resources necessary to make the appropriate decisions regarding legal, professional and ethical obligations related to their role as consultants to health care providers and others involved in the health care industry, and 3) to monitor, audit and provide corrective mechanisms to ensure those obligations are met.
Since we have provided education and rules and guidelines to follow, the staff can now be held accountable as we are by the government. In accordance with the provisions of the code of conduct, personnel found to have violated the HIPAA Compliance Program will be disciplined in an appropriate, measured, and consistent fashion, regardless of their position within the organization. Violations (including failure to report the misconduct of other personnel) may result in disciplinary actions, including possible immediate termination. The specific disciplinary action taken shall be determined on a case-by-case basis by the Team Resource director in conjunction with the HIPAA Privacy or Security Officer. The range of sanctions shall include mandatory retraining, verbal warnings, reduction of bonus, and/or suspension, or termination.
Certain violations of the Compliance Program are particularly likely to justify immediate termination. These offenses include: a) violation of any state or federal statute; b) failure to report conduct by staff or client personnel that a reasonable person under the circumstances should have known was a violation of law, or a violation of our HIPAA Compliance Program; c) willfully providing materially false information to the group, the attorneys, a government agency, or other person in connection with any matter related to any services provided by our group; and d) taking or attempting to take any retaliatory action against any person for making any compliance report or raising any compliance issue in good faith.
Conclusion
The responsibility to prevent fraud in our health care organizations really is a job that we’re all responsible for in some way or another. Every member of a team has their own role to play in this plan. The organization counts on each and every member to do their part. In my opinion the most important element of any fraud preventing plan is to ensure the education of each of its employees. Educated staff makes educated decisions. Also, key to this success is remaining current on all the changes. This is an industry that is constantly changing. It sometimes feels as if a full time employee is needed just to ensure the compliance with all regulatory updates. Fraud is such a contributor in the rising cost of health care in our nation. We are in such crisis. If every provider of service in health care took the initiative and the stance to not accept these types behavior we would probably not have the issues with fraud that we have today. Ultimately we must remember why we do what we do. It’s all about the patients and their wellbeing. That’s who we work for. We must act accordingly.

References

Showater, J. Stuart. (2012). The Law of Health Care Administration (6th Edition). Washington DC. AUPHA Press.

http://www.fbi.gov/about-us/investigate/white_collar/health-care-fraud - Accessed September 6, 2013

http://www.lawyersandsettlements.com – Accessed September 6, 2013

http://www.prnewswire.com/news-releases/bextra-whistleblower-case-started-investigation-of-pfizer-62040062.html - Accessed September 7, 2013

http://www.paed.uscourts.gov/documents/opinions/97D1191P.pdf - Accessed September 7, 2013

http://www.justice.gov/opa/pr/2009/January/09-civ-038.html - September 8, 2013

http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Avoiding_Medicare_FandA_Physicians_FactSheet_905645.pdf - Accessed September 8, 2013