The healthcare industry is one of the most complex in the world, making it ripe for fraud. Attorney John LeBlanc of Manatt discusses why healthcare fraud matters and what can be done to fight it.

“There is a lot of fraud going on, whether it’s the number of hours being billed to Medicare or Medicaid for services that were not provided, upcoding of insurance claims, double billing for services,” said LeBlanc.

LeBlanc also described how physicians are recruited to participate in these schemes illegally. “Often, they’re making more money on the illegal side than they are legally. The other thing that’s going on is these managers of these clinics are telling them that they can be part of the management team, but then not paying them their share, or making it look like they are paying them extra money, when in fact, the ‘extra’ money they are receiving is coming from overbilling.”

“It is important for these people to understand that this practice of healthcare fraud not only involves millions and millions of dollars, but you could be losing lives,” said LeBlanc.

The Affordable Care Act has several provisions to fight fraud, including a provision that locks the assets of healthcare providers convicted of a felony related to fraud. Other key requirements include increased penalties for individuals convicted of health care fraud and more coordination between federal agencies.

“There are now mandatory exclusions under Medicare, and if you have been convicted of a felony related to fraud, you are excluded from participating in Medicare for at least ten years. It used to be only five years,” said LeBlanc. “And, the other change is that there is no safe harbor provision any longer where if you want to report yourself or have your lawyers report you, it’s automatically five years. The government has to agree, so it incentivizes the government to agree because they will have exclusive use of your information for ten years.”

Another provision of the Affordable Care Act, known as the Stark law, makes it a felony to knowingly and willfully solicit or receive any remuneration from a person for referring an individual to another entity. The law was meant to prevent physicians from having financial relationships with medical facilities that they refer their patients to. However, there are some exceptions to this rule. For example, if a physician owns part of the medical facility, they may refer patients without violating the Stark law.

Healthcare fraud has severe consequences for those who participate in it and those who pay for healthcare services. According to LeBlanc, there is also the risk that patients’ lives could be put at risk due to these schemes. “These are real risks. It is difficult to return money that has been lost, and often the government will only be able to recover a percentage of what was billed.”

LeBlanc concluded by saying, “The government will be able to look at various ways of recovering funds, one is through the False Claims Act, there are also provisions in the Anti-Kickback Act. People need to understand that they need to protect themselves if they are doing something illegal or if they know someone who is doing something illegal.”