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Healthcare Fraud Investigations

In general there are three types of federal healthcare fraud investigations. One is a False Claims Act investigation by the Department of Justice (“DOJ”). Another is a quit tam or whistleblower investigation and lawsuit brought by a private individual. The third is a criminal investigation, investigated by federal law enforcement agencies and prosecuted by DOJ.

Healthcare fraud investigations can seem overwhelming, with each turn representing a new regulation, penalty, or potential consequence. In this article, I provide insight into the process, duration, and penalties associated with healthcare fraud investigations. With billions of dollars lost annually to fraudulent activities, understanding these investigations is paramount for anyone involved in healthcare. 

Healthcare fraud investigations can vary in duration due to multiple factors, making them unpredictable. While straightforward cases may be resolved within approximately 2-3 years, larger or more complex matters can take even longer. In qui tam investigations, it is important to note that the government often requests extensions during the initial seal period of 60 days to continue the investigation.

With over 40 years of experience practicing law, Richard A. Serafini is a federal criminal defense lawyer who can help you through the process.

Understanding Healthcare Fraud Investigation Procedures

Healthcare fraud costs American taxpayers an exorbitant amount of money every year. Therefore, federal and state governments direct immense resources towards curbing this illegal activity. Healthcare fraud investigations typically involve the systematic review of medical records to detect inconsistencies or fraudulent billing activities. The duration and penalties for these investigations are unpredictable and vary widely.

In a qui tam/”whistleblower” investigation, there is an initial period of 60 days in which the court seals the matter, but the government often requests extensions to continue the investigation to determine whether to intervene on behalf of the whistleblower. Complex cases can take a long time to investigate as there is a need to process and review mountains of evidence, interview witnesses, and conduct statistical analyses. The government must be able to prove when, where, and how the fraud occurred before intervening and thus unsealing the case.

Settlements with defendants can take many months as they review allegations, prepare their defense, negotiate settlement terms, and conduct ability-to-pay analysis if necessary. Corporate Integrity Agreements may be required by affected agencies as part of the settlement negotiation process. Litigating a False Claims Act case to successful completion can take years.

Whistleblowers receive a share of the recovery after the government intervenes.  If the government chooses not to intervene, the whistleblower may proceed on his or her own. The percentage of the recovery that goes to the whistleblower is much greater if the whistleblower prosecutes the case without the intervention of the government. In practice whistleblowers rarely proceed without government intervention. The cost and time involved is simply too great for a private litigant to bear in hopes of ultimate recovery. Healthcare whistleblower cases typically require the expertise of experienced counsel able to determine the likelihood of ultimate success and government intervention.

  • According to a study by the Department of Health and Human Services, straightforward whistleblower fraud cases are typically resolved within an average time frame of 2-3 years.
  • A report by the Justice Department in 2020 indicated that complex cases, especially those involving large organizations, can extend beyond five years due to the extensive investigation process.
  • An analysis published in The Journal of Law and Economics found that False Claims Act litigations may continue for many years before reaching conclusion.

Who Conducts Healthcare Fraud Investigations?

Healthcare fraud investigations typically involve various entities on both federal and state levels. At the federal level, DOJ leads healthcare fraud investigations alongside state-based Medicaid Fraud Control Units. Additionally, agencies such as the Federal Bureau of Investigation (FBI), Internal Revenue Service, and the Department of Health and Human Services Office of Inspector General all play a role in healthcare fraud investigations.

These agencies work collaboratively to detect, investigate, and bring cases of healthcare fraud. It is important to note that state attorneys general also have the authority to pursue cases of healthcare fraud, especially where Medicaid funds are involved.

In simpler cases, state attorneys general typically oversee proceedings while more complicated cases often need the DOJ or FBI. The particular agency responsible for investigating a case generally depends on the jurisdiction and circumstances surrounding it – as well as the resources available at any given time.

Individuals with backgrounds in data analysis, finance, or medicine are often members of investigative teams helping gather relevant and analyze information efficiently.

Civil vs. Criminal Implications in Investigations

When it comes to healthcare fraud investigations, cases may be civil or criminal. In a civil lawsuit, the government seeks monetary compensation from defendants. This is different from a criminal prosecution in which the defendant is punishable with imprisonment and fines. Although not involving the potential for prison, civil lawsuits can still bear considerable consequences such as exclusion from participating in federal healthcare programs and draconian civil monetary penalties.

Factors Influencing the Duration of Fraud Investigations

The duration of healthcare fraud investigations varies widely due to various factors. For straightforward cases involving limited parties and evidence, investigations can come to a close within two years. However, for more significant and complicated matters, it may take much longer. As with any large and complex case, the investigation may take as much as two years followed by a lengthy court process. Those accused of fraudulent activities must be afforded time to review allegations and evidence. Moreover, preparing defense or settlement positions is similarly time consuming. Settlements with defendants may take months as both parties agree on settlement terms and potential payment arrangements through ability-to-pay analyses. Some defendants might even choose to litigate rather than settle.

For instance, suppose there’s an investigation into Medicare fraud committed by a healthcare provider that has uncovered widespread deceptive billing practices affecting hundreds of patients over several years. Investigators would need time to process immense amounts of data obtained before questioning witnesses about specific circumstances.

In complex cases where settlements aren’t feasible or are perceived as inadequate, lengthy litigation may occur. Litigating these cases until completion may require years.

Investigating healthcare fraud is a journey, similar to scaling mountains; it requires meticulous preparation, perseverance, patience, and knowledge. Moreover, the involvement of whistleblowers in qui tam actions can influence the duration of investigations. Additionally, the complexity and severity of a fraud case may require expertise from different governmental departments, resulting in long periods of investigation.

Complexity and Severity of Fraud Case

The complexity and severity of a case can significantly impact how long it takes to investigate healthcare fraud. As noted earlier, good cases take time to investigate since there is a need to process and review large amounts of evidence, interview witnesses, and conduct necessary statistical analyses.

Additionally, investigating healthcare fraud may require specialized knowledge or expertise team members may need to acquire before presenting a strong case in court. This means further delays due to training or hiring new talent.

Moreover, complicated matters typically require significant resources that include multiple investigators, forensic accountants, paralegals, and analysts – making them all-around costly endeavors. Another critical factor affecting the duration and outcome of a healthcare fraud investigation is the role of witnesses and their cooperation.

Role of Witnesses and their Cooperation

Witnesses play an integral role in any fraud case, healthcare inclusive. They form the chain linking fraudulent activity to evidence. The government depends heavily on their statements and input to build successful cases that can stand up against  defense efforts. 

As mentioned, the nature and duration of healthcare fraud investigations may vary significantly depending on many different variables – including complexity, severity, witnesses, and expertise involved. Understanding these factors can help patients and whistleblowers navigate successful outcomes or better comprehend what legal action investigators are taking.

A Look at the Penalties for Healthcare Fraud

Healthcare fraud is a serious matter, and the criminal and civil penalties for those found guilty or liable are severe. Depending on the nature of the offense and other factors involved in the case, penalties can range from civil monetary penalties to fines to imprisonment and exclusion from Federal healthcare programs.

For instance, the False Claims Act  stipulates that filing false claims can result in fines up to three times the program’s loss plus $11,000 per claim filed. Whistleblowers who report any offenses receive a percentage of recoveries. On the other hand, the Anti-Kickback Statute criminalizes paying for referrals and carries a potential prison term, significant fines, and likely exclusion from Federal healthcare programs.

Fines and civil monetary penaltiesFrom thousands of dollars to millions
ImprisonmentFrom several months to over a decade
Loss of licensePermanent
Exclusion from Federal healthcare programFrom several years to permanent exclusion

The Importance of Whistleblowers in Healthcare Fraud Cases

When it comes to combating healthcare fraud, whistleblowers play an integral role in exposing illegal or unethical practices within the industry. They provide valuable information that authorities can use during investigations, leading to successful prosecutions.

In 2018, the Department of Justice recovered $2.8 billion – most of which was through qui tam lawsuits. This amount would not have been possible without whistleblowers who brought forward evidence of improper practices.

In addition to providing critical information for investigations and legal proceedings, whistleblowers also contribute significantly towards increasing transparency within an organization. By speaking out against wrong-doing, employees are encouraged to act honestly and with integrity, creating a healthier work environment.

Debates surrounding whistleblowing center on the potential retribution against whistleblowers. However, strong whistleblower protections exist for those who report healthcare fraud. Employers must respect the confidentiality of whistleblowers and cannot take retaliatory actions against them.

Overall, whistleblowers offer an essential channel to uncovering healthcare fraud and ensuring transparency within an organization. They play a critical role in protecting patients and ensuring that the healthcare system operates ethically.

Are you Being Investigated for or Charged with Healthcare Fraud? Are you a Potential Whistleblower

If you are being charged with healthcare fraud or are involved in a healthcare fraud investigation or are a potential whistleblower aware of healthcare fraud, the Serafini Law Office can provide you with the best representation possible. Our team will work tirelessly to protect your freedom, rights, and reputation if under investigation or to guide you through a qui tam lawsuit.

Mr. Richard A. Serafini is a defense lawyer who has been practicing law for over 40 years.

He is a former senior prosecutor with the U.S. Department of Justice and supervisor with the U.S. Securities and Exchange Commission. At DOJ he prosecuted some of the largest healthcare fraud cases charged by the United States. With his vast knowledge and experience in investigations, criminal law, and civil enforcement he is the person you need to formulate an aggressive strategy to help you achieve the best results.

Our law firm offers representation throughout the United States and particularly in the following cities and states: Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Florida, Pennsylvania, and New York. 

Contact us at (754) 223-4718 for a free consultation.