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The false claims act and healthcare fraud: new rules target billing practices

Only a tiny percentage of doctors participate in fraudulent billing activity. But the Affordable Care Act (ACA) has government scrutinizing healthcare coding, billing and referral practices more closely than ever before.

The zealous oversight could potentially become overzealous and subject healthcare providers to criminal healthcare fraud or insurance fraud charges. Prosecutors could also use the federal False Claims Act in cases where Medicare, Medicaid or other types of federal reimbursement were involved.

Recognizing these risks, healthcare managers in the St. Louis area and across the country are examining their compliance programs. The goal is to make sure that broad new federal rules do not improperly brand law-abiding doctors and administrators as suspects in healthcare fraud investigations.

The potential applicability of the False Claims Act (FCA), in particular, is a source of concern. When Congress passed the Affordable Care Act in 2010, the scope of the FCA was expanded significantly. It is now much easier for federal investigators to begin investigations of alleged fraud in healthcare billing.

There are already reports from around the country of litigation regarding federal charges of FCA violations. For example, federal authorities alleged that a dermatologist in Florida accepted kickbacks and billed Medicare for services he did not provide. This month, the dermatologist settled the case for more than $26 million - though there was no admission of wrongdoing.

Of course, many cases are civil in nature, not criminal. But federal investigators are targeting suspected criminal fraud as well. Again, the number of doctors who engage in such practices is very small. But with the new rules so broadly drawn, doctors across the board should be more aware of billing practices and rule compliance.

Source: "Empowered by ACA, old fraud law puts new scrutiny on doctors," American Medical News, Alicia Gallegos, 2-25-13

Our firm handles situations similar to those discussed in this post in the St. Louis area. To learn more about our practice, please visit our white-collar crime defense page.

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