South Florida Hospital News
Friday October 30, 2020

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March 2009 - Volume 5 - Issue 9


Hot Topics in Compliance

The Federal government has aggressively prosecuted health care fraud since the early 1990ís, resulting in billions of dollars in financial recoveries and criminal liability. The impact of these efforts has been acute in South Florida, where multi-agency task force efforts have resulted in numerous successful enforcement actions. Over the past decade, substantial resources have been dedicated by the government to investigate and prosecute health care fraud and congressional action continues to indicate a continued focus on eradicating fraud in the health care industry.

HIPAA provided new criminal and civil enforcement tools and funding dedicated to the fight against health care fraud. HIPAA was also the first federal statute to regulate private health care and noticeably augmented the government's power to prosecute health care fraud.

Penalties for violating HIPAA vary and may result in monetary fines and/or imprisonment. Any organizations charged with health care fraud are required to adopt government supervised corporate integrity programs, as required by the Department of Justice ("DOJ") and Office of Inspector General ("OIG").

The federal Medicare and Medicaid Anti-Kickback Statute makes illegal certain conduct involving improper payments in connection with the delivery of items or services covered by federal health care programs. More specifically, the statute prohibits knowingly and willfully paying or receiving any remuneration directly or indirectly, overtly or covertly, in cash or in kind, in exchange for prescribing, purchasing, or recommending any service, treatment, or item for which payment will be made by Medicare, Medicaid, or any other federally funded health care program.

Violations of the Anti-Kickback statute constitute a felony punishable by a maximum fine of $25,000, imprisonment up to five years, or both. Conviction also will lead to automatic exclusion from the Medicare, Medicaid, and other federally-funded health care programs.

Congress enacted the Omnibus Reconciliation Act of 1989 ("Stark I") to thwart the growing cost of health care due to physician self-referrals. Stark provides that if a physician, or immediate family member, has a direct or indirect financial relationship with an entity that provides designated health services, the physician cannot refer the patient to such entity for designated health services and, likewise, the entity cannot submit a claim for the designated health services, unless the financial relationship falls within an exception.

Besides criminal liability, civil prosecution can lead to a variety of consequences such as administrative sanctions, suspension, offset and recoupment, exclusion, and money penalties.

In an effort to foster greater financial accuracy and curb corporate malfeasance the government enacted the Sarbanes-Oxley Act of 2002 ("SOX"). The SOXís intent is to improve corporate governance, public auditing, and agency oversight in order to protect the public. It also requires heightened accountability for financial reporting and places heightened responsibility on high level officers.

The SOX was the governmentís first attempt to govern corporate conduct through the imposition of criminal liability on individual executives for investor fraud. The courtís emphasis also is on corporate governance and acknowledgment that members of a board of directors have some fiduciary responsibility to monitor an enterprise and assure that the corporation is functioning within the boundaries of the law. Clearly, directors of health care organizations owe a fiduciary duty to shareholders concerning compliance with the law.

The government has certain expectations of business organizations and is concentrated on preventing, detecting and prosecuting health care fraud. Business organizations should operate as partners with the Federal and state governments in detecting and preventing misconduct and in promoting an ethical corporate culture. They also should cooperate in the investigation of the organizationís own wrongdoing. Organizations which fail to seek out wrongful conduct and non-compliant activity, therefore, will likely suffer the consequences of not doing so.

Because health care fraud costs taxpayers billions each year, federal and state agencies have made health care fraud prosecution a primary focus. Likewise, stemming from corporate malfeasance in the health care industry, Congress has reexamined the issue of corporate accountability and enacted laws calling for greater accuracy of information and allowing for personal liability. Companies large or small, both public and private, and all health care providers must ensure that they have compliance programs in place to prevent fraudulent claims, and must make every attempt to search out wrongful conduct, or they will likely suffer great consequences.

Gabriel L. Imperato is the Managing Partner of the Fort Lauderdale office of Broad and Cassel. He is board certified as a specialist in health law and is Certified in Healthcare Compliance by the Health Care Compliance Association. He can be reached at (954) 745-5223 or
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