Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

Several weeks ago, I wrote about cases involving multiple defendants, and how people often comment: What about… and why weren’t they prosecuted? There is a similar opinion when it comes to the amount of money we see recovered in healthcare fraud cases. People tend to get very agitated when the number seems to be very low in comparison to what the fraud appeared to have truly amounted to. I am also one of those people.

The ultimate decision on what the “agreed to” loss amount, or damages calculation will be is usually the result of negotiation, discussion and compromise that occurs between the US Attorney’s Office responsible for the prosecution (or the Strike Force Trial Attorney from DOJ) and the defense attorney in the matter.  In criminal cases, the loss amount is the driving force behind a defendant’s sentencing. The higher the amount, the longer potential for imprisonment.  There is a slew of other factors, but the money is the main driving piece under the US Sentencing Guidelines. With that in mind, a defense attorney will work to try to get that number as low as possible, through a variety of methods.

What is important to always understand and remember is that the calculation of actual loss amounts can be difficult, time consuming, and costly.  As such, negotiated numbers based on the facts known (and sometimes via the use of statistical sampling) can help to settle a matter where the prosecution can be resolved.  I always subscribed to the belief that if you “borrowed” $1 from the government, you should pay back $2.  I never had an issue with cases where a global settlement was reached, which is where a civil and criminal resolution is reached, and often much of the financial liability is shifted to a civil remedy to offset the criminal exposure.  In these instances, the government recovers money for the Trust Fund and the Treasury, and requirements for specific and general deterrence are met for the criminal conviction.

The reality is that housing people in prison costs a lot of money.  The longer the sentence, the greater chance that person will be housed in a higher security institution. The collateral effects of a criminal conviction of a healthcare provider can be as devastating as the conviction itself.  There is always a need for deference, both specific and general.  The point I am trying to get across here is that I do not think that anyone is ever happy (from an outsider looking in perspective) with the sentence a judge renders, or the amount of money identified for forfeiture, restitution, or damages.  Yes, the fraud in healthcare is unbelievable, and those in the fraud, waste and abuse world should be angry about it, since much of it has a preventable solution. However, it is also important to keep in mind that if every defendant in a case opted to go to trial, the criminal justice system would grind to a halt.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.