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What are some components that constitute a viable healthcare-fraud case?

By Subodh Chandra

One of the federal prosecutors who mentored me when I served in the Justice Department used to say, “The difference between white-collar crime and street crime is that in a street-crime case you know a crime was committed, you're just trying to figure out who did it. In a white-collar-crime case you know who did it, you're just trying to figure out whether or not it’s a crime.” The main way one tries to determine whether a case is a criminal act of healthcare fraud is by discerning the provider’s intent. The federal or state governments are only rarely going to find a smoking gun of intent where one hears a physician audio or video recorded saying, “Let's defraud the government and do it this way.” Instead intent is going to be inferred from all of the documents, circumstances, and witnesses, including employees. They’ll be asked questions about what they knew, statements that the provider may have made, suspicious behavior in which the provider may have engaged, and what the employees observed.

Many of the healthcare-fraud cases in which we've been involved either as plaintiffs’ counsel on a False Claims Act case, or while defending an accused provider, have involved former employees as whistleblowers. Sometimes those whistleblowers are credible and sometimes they're not. Sometimes they're disgruntled people who were trying to retaliate against a physician for holding them accountable for poor performance. Sometimes they’re both disgruntled and right about fraud. A lot of the government's focus is going be on the credibility of any whistleblowing witnesses and what the documents show. What do the records show? Do the records look normal compared to large data sets? Many healthcare-fraud cases are identified by the health-insurance companies, including government insurance companies like Medicare, running these big data tests.

For example, we were involved in a case where a cardiologist was off the charts in terms of the number of stents he was giving and the number of interventional procedures the cardiologist engaged in that paid significantly more than what the average cardiologist would be receiving. That’s going to be a red flag for the government and it’s going to draw that anomalous dataset to the attention of special agents who will start investigating.

One of the biggest challenges I faced as a federal prosecutor and when doing criminal-defense work in healthcare fraud is that it takes time for providers to come to terms with what they've done. They may have started cheating a little innocently at first, then because of financial or special needs in their family they start to do more and more until they get caught. Sometimes it takes them time to come to terms with what they’ve done and that's a process of negotiating with the government and trying to get as much free information as one can to evaluate the strength of the government’s case. Some federal prosecutors will let you look at the evidence and determine what’s there. Others are more cruel and will say, “Your client knows what he did and he needs to plead guilty.” The client says, “I didn't do anything. I have no idea what they're talking about.” Then the defense attorney is stuck in the middle having a challenging time advising the client about what to do. Some providers have extraordinary resources and want to fight everything.

Then, because those discussions happen pre-indictment, you won’t learn until after they’re indicted, and you start getting the criminal discovery (documents) to which your client is legally entitled—but a good deal isn’t on the table anymore. That's when you start finding out that this healthcare provider is cooked. Sometimes we determine that our client is innocent. We fight for them all the way—but statistically, the odds generally favor the government in these cases.

When I was a prosecutor, we would rarely prosecute medical-necessity cases because they were too hard to prove; they're more like malpractice cases. Those wouldn't be viewed as a criminal case unless there was something like a kickback involved or someone was harmed. Nowadays, the federal government is much bolder. They have a lot of friendly judges on the bench—a lot of ex-prosecutors. The prosecutors may feel that they have a home-court advantage and they'll press some cases that really shouldn't be pressed criminally. That puts individuals and families in the difficult spot of deciding whether to roll the dice in a trial against the government because failing to plead guilty and “accept responsibility” under the federal sentencing guidelines can result in a much more severe sentence by a factor of several years. The main thing that drives the federal sentence is the amount of the loss—combined with the issue of whether you accepted responsibility and whether the government can pile on additional charges.

For more information on viability of a healthcare-fraud case, and elsewhere, please call our office today at (216) 578-1700 and speak with one of our intake specialists, or fill out our online contact form.

Related Practice Areas
False Claims Act (Qui Tams)Healthcare FraudWhistleblower Actions (False Claims Act)

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