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.

People inherently trust their healthcare provider.  You go to your practitioner and expect that each and every decision that is made is done so with your best health interests in mind.  When a healthcare professional gives you a prescription for a medication or an order for a diagnostic test, how many patients actually question that provider about the medication or the test that has been ordered?  More importantly, how often do patients question any relationship the provider may have with the sales representative for the manufacturer for the drug your provider wants you to take, or the facility where they are “suggesting” you go for your diagnostic test?  And finally, what about those providers who tell their patients they can go where ever the patient chooses to go for the test, but… “we have a technician who comes right here to the office every week and can do the same test right here.”

Unfortunately, these scenarios play out daily.  The prevalence of kickbacks in the healthcare system is something that I believe the general public does not fully comprehend.  As an OIG Agent, I investigated and was involved in numerous prosecutions of healthcare professionals who had their judgment tainted by the wide availability of quick cash in return for the referral of their patients.  I would always describe the payment of kickbacks as healthcare human brokering.  The provider really does not have the patient interest in their heart; the cash at the end of the referral is the driver.

Kickback cases can be difficult to investigate and prosecute.  You need someone to tell on themselves.  Typically, the case would evolve from a cooperating witness who found they were in a predicament from some other issue; coding and billing issues would be a good example.  That provider was cornered because codes and documents were the needed proof that there was a fraudulent act committed.  A good defense attorney versed in healthcare fraud fully understands that the dollar amounts, position of trust and any of the other various enhancements available under the US Sentencing Guidelines, can really create the potential for a lengthy prison sentence, coupled with asset forfeiture, fines and restitution that will make life after prison unrecoverable.  That same provider who is committing healthcare fraud really needs what the US Sentencing Guidelines call the 5K1.1 departure (known as a 5K letter from the prosecuting Assistant US Attorney).  It may not be the “get out of jail free” card everyone hopes to receive, but given the amount of cooperation, may be a very relevant factor for a sentencing judge to use in determining where on the sentencing spectrum a defendant may land.

In nearly all of my investigations, I had a cooperating witness who worked very hard to earn the 5K letter.  It is unfortunate, but healthcare providers who engage in healthcare fraud have very few lines they will cross from a financial fraud perspective.  I am often asked why it is so bad that the payment of a referral is problematic; after all, it is done in nearly every other business relationship.  The simple answer is that patients often are not really consumers.  We as patients, do not usually have the convenience of time or the ability to shop around for our healthcare.  More importantly, the public is not educated enough about the conditions, diagnostic testing, treatments and care that is necessary to be healthy.  As such, we as a course of action (and rightfully so) place an unbelievable level of trust in those who are trained to provide the insight into those issues.

I will leave this week’s blog with a very short “war story” that will always resonate with me:  a physician, who was receiving kickbacks from a cooperating witness, was paid as little as $200 per month for referring MRI tests.  The cooperating witness wore video and audio recording devices when the kickback payments were made.  There was no question the kickbacks were being paid, and what the nature of those payments were.  The provider had an extremely profitable practice, as he provided not only general medical care, but anti-aging care to cash paying patients in a very affluent area in New Jersey.  The $200 meant nothing to this doctor in the grand scheme of things.  It would not have covered the amount of gas his luxury SUV needed in a month.  All that being said, even only getting a mere $200 a month in cash kickbacks, he had the audacity to describe how his practice was going to expand exponentially, as he was going to be featured in a reality show, as one of the reality show stars had recently been treated by the provider as part of his anti-aging practice.  He was excited, as it meant he would be sending more MRI tests to the cooperating witness’ business.

There are other ways, via data analytics, to identify “questionable” relationships, but in the end, human intelligence is always an important part of the equation.

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.