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With the New Year, comes more of the usual news about unscrupulous providers being snagged for what else, taking kickbacks.  We all read the news, and all hear the term “quid pro quo.”  “If you scratch my back, I will scratch your back.”  It seems that over the past few months, we have read case after case of defendants in kickback cases.  Kickback cases are prevalent, and the question to ask is why aren’t there more such prosecutions?  Simply put, no cooperating witness, no case.  It is obviously a bit more complex, but generally, you have to tell on yourself to have a good kickback case.

If it is a case with cash being paid for the referral of patients, someone on the inside must be able to provide the information that will lead to a video and/or audio recording to support that assertion.  If it is a kickback case with something that masks itself as something other than cold hard cash (a services agreement, sham rental agreement, etc.) you still need that human being to put context behind the meaning of the agreement.  Even with cooperating witnesses and proper context, securing a conviction can be a daunting task.

In 2014, and into 2015, I had three kickback trials nearly back to back.  Over a 14-month period, two defendants were tried on what anyone seeing the evidence would have presumed was a “slam dunk.”  There really is no such thing.  In both trials (and it was really three, as the first defendant’s trial resulted in a hung jury, so we had to retry the same defendant), there were no less than two videos, with audio, of the defendants taking the cash.  In fact, the cash was plainly handed to the defendants, not in an envelope, and with no code being used to describe the nature of the payments.  The cooperating witness handed the cash, which he explained was for MRI referrals for the prior month, the breakdown of the money by type of insurance and by test, and even apologized for having bene a few dollars short in the payment, as he did not have the correct amount with him.

The jury in the first case was hung for a variety of reasons, which are not relevant to this discussion.  Needless to say, in the retrial, the defendant was convicted in about 40 minutes; 20 of which the exhibits were not even in the jury hands as they were being put together to give to them.  The second trial was nearly as swift.  Had there been no cooperating witness, and no ability to obtain the crime as it actually happened, it would have made detection and apprehension and prosecution much more difficult, if not impossible.  Often times, such matters are within a particular cultural group, so it is difficult to get into the group, other times, those receiving the kickbacks are so fearful of being caught or otherwise implicated, there is a feeling that they must be part of the scheme or face social or cultural persecution.  I saw this behavior in cases we worked at the OIG in the Eastern District of New York, where certain cultural groups exist in Brooklyn, and rely upon fear tactics to perpetuate the kickback scheme.

In the end, everyone will always hear about those cases and the huge amounts of money that the Medicare program paid as a result of the kickbacks, but that will always just be the tip of the iceberg.

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.