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.

As some of you may have seen in a LinkedIn post I wrote, I was interviewed by a professor at Florida International University. The professor is writing an article for the Harvard Business Review on healthcare containment costs. During my conversation, I was asked about various aspects of cost containment, and my experiences as an OIG agent on the effects of deterrence in stemming fraud.

I started my career as a Federal Probation Officer in the Eastern District of NY. I conducted presentence investigations used in support of sentencing federal defendants. That coupled with my long-time home at the OIG, gave me a great foundation to understand the criminal justice system in ways beyond my undergraduate and graduate education. I understand the US Sentencing Guidelines, loss calculations and the importance of deterrence, as it is always addressed by the sentencing judge.

In discussing my thoughts on deterrence, it reminded me that deterrence is both specific and general.  Generally, the punishment portion of a sentence should send a message to the healthcare fraud community that the behavior that got the unscrupulous individual in their position will not be tolerated in the aggregate.  More specifically, it is intended to be a message to the offender that such behavior will result in potentially severe penalties and should hopefully place the offender on the right path.  When I’ve been asked about what I did for a living, I used an old statement from my mentor at the OIG, who called being an OIG agent “an anti-social behavior modification specialist.”

Does prosecution of healthcare offenders really provide a general deterrence?  Each and every day we read about healthcare providers being charged and prosecuted for the fraud they committed.  The volume of fraud continues to grow, and it appears to be unabated by the efforts of the SIUs and law enforcement communities. Does it have a specific deterrent effect?  Well….in my time at the OIG, I investigated and worked on prosecutions of a lot of podiatry fraud cases.  My first one was shortly after 9/11 and was in the Southern District of NY. It was an approximately $20 million fraud, involving nearly 20 defendants. It was a trial by fire me, as the original case agent left the agency, right as trial preparation started. Many of the hard copy documents were in World Trade Center, so that created some evidence issues, in addition to it just being a really bad time for NYC. One 3-month long trial with 4 defendants later, they were all convicted.

I was the case agent on a podiatry case here in NJ, where we executed a search warrant.  While searching the podiatrist’s office, I found that he had prominently displayed two newspaper articles about two other podiatrists that were prosecuted for healthcare fraud.  I laughed a bit, because I had been the investigating agent on those two cases as well.  There I was, conducting a search warrant at a podiatrist’s office for healthcare fraud, and he had articles about his peers being prosecuted for healthcare fraud.  The irony of it all.

Back to the question of specific deterrence; apparently not.

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.