In March 2007 the Medicare Fraud Strike Force originated in South Florida as a ground-breaking joint effort between the U.S. Department of Justice’s Criminal Division Fraud Section, the U.S Attorney’s Office for the Southern District of Florida, Health and Human Services Office of Inspector General, as well as state and local law enforcement agencies to prosecute individuals and businesses that did not provide legitimate health care services, but existed and operated for the sole purpose of stealing money from the Medicare coffers.
Over the last seven years, this first-of-its-kind strike force in the health care arena has become a model of innovation in terms of strategy, methodology and practice, but also quite some controversy. According to the Department of Justice, as of early 2014, the Strike Force, now in nine cities, has charged more than 1400 defendants, who have collectively billed the Medicare program for more than $4.8 billion. In addition, hundreds of millions of dollars have been returned to the Medicare Trust Fund through restitution and forfeiture. The question has been asked, however, whether the government has overreached in some of these healthcare fraud investigations and prosecutions. This aggressive approach smells from governmental over-reach, and requires anyone charged in a Strike Force case to seek out a Federal Criminal Attorney well experienced in Healthcare Fraud matters to present an effective defense.
The philosophy of the Strike Force is simple: Analyze current billing data to find outliers – providers who were billing Medicare such exorbitant amounts that the only legitimate explanation was a fraudulent one. Because the frauds were on-going and huge sums of money were being extracted from the system, the Strike Force focused on quick prosecutions. In a typical federal prosecution, including health care frauds, an investigation could take several months or even years. In a Strike Force case, the idea was to gather enough evidence to prove the defendant’s guilt beyond a reasonable doubt, but no more. If the target was engaged in multiple schemes, the Strike Force would concentrate on the easiest one to prove and charge just that one. This technique allowed for quick prosecutions – shortening investigations often from months or years to weeks.
The data comes in many forms including provider claims, cost reports, prescription data, SEC, non-profit and UCC filings, among a myriad of other sources. Investigators analyze it in many ways through data queries, correlations and trend analysis (by provider type, CPT code, locations, etc.). They perform peer comparisons, statistical sampling, and conduct “impossible days” analyses – where providers billed for more than 24 hours of work in one day. They look for double billing and upcoding (billing for a more expensive service when a less expensive one was actually performed). These analyses help determine whether fraud is evident and if an investigation is warranted. The data helps begin the investigation, but as noted below, is by no means the only technique used.
While the data analysis is critical to identify potential fraud schemes, it is very rarely, if at all, enough by itself to prove a particular defendant’s guilt beyond a reasonable doubt. As the Strike Forces have expanded, so too, have their techniques. Recently they have employed many staples of traditional law enforcement to investigate health care fraud, such as the use of cooperating witnesses, handwriting comparisons, undercover operations, and wiretaps with much success. Such techniques are necessary as schemes gain in complexity and involve beneficiaries, who are unlikely to cooperate with the investigations.
Over the last several years, the Strike Force has begun to take on even more diverse fraud schemes. At the same time, the government has employed certain tactics — both in court and in the court of popular opinion to tilt the playing field.
Take for example the recent cases filed across the country during the May 2014 “healthcare fraud takedown.” On May 13, 2014, the government — meaning the U.S. Department of Justice — put out a press release with the following title: “Medicare Fraud Strike Force Charges 90 Individuals for Approximately $260 Million in False Billing.” At first blush, this sounds like one massive case — or at least a series of cases that are somehow related. The impression given to the public is that a giant fraud on the government, involving dozens of criminals, has been dismantled by law enforcement. In fact, when parsed out, it becomes apparent that the government merely orchestrated the arrest of several totally unrelated cases — in 6 different cities — just to generate publicity. The only thing that connects these cases to each other is that they involve some form of alleged healthcare fraud. That’s it. The government charged dozens of individuals, claiming millions of dollars of losses to the Medicare System. The government charged these individuals with a variety of federal healthcare fraud offenses including:
Healthcare Fraud: Title 18, United States Code, Section 1347
Healthcare Fraud Conspiracy: Title 18, United States Code, Section 1249
False Statements regarding healthcare fraud: Title 18, United States Code, Section 1035
Money Laundering: Title 18, United States Code, Section 1957(a) and (b)
False Statements in a Federal Investigation: Title 18, United States Code, Section 1519
HIPAA Violations: Title 42, United States Code, Section 1320d-6
Criminal Forfeiture: Title 21, United States Code, Section 853(p) and Title 18, United States Code, Section 982(a)(7).
The last 7 years have seen a meteoric rise in health care fraud prosecutions around the country, primarily due to the Medicare Fraud Strike Force. It has employed various investigative and prosecutorial techniques, acted quickly, and created a model that is not only likely to be around for many years to come, but also be copied in other industries as well. This is particularly true if the government continues to bend reality in its press releases and public statements.
To learn more about Federal criminal laws, such as those involving Federal Healthcare Fraud Offenses, review the Federal criminal law section of Saland Law PC’s website linked above and below.
Founded by former prosecutors, the Federal criminal defense lawyers at Saland Law PC represent clients accused of violating Federal criminal laws and statutes in the New York and metropolitan area, as well as nationwide.