COVID and Healthcare Fraud
In a little less than a year, federal and state decision-makers authorized about $5 trillion of coronavirus aid. By comparison, the federal budget for an entire year (2020) was $4.79 trillion. When that much money becomes available in such a short period of time, some negative repercussions are inevitable. High inflation is one possible effect. For the purposes of this article, possible healthcare fraud is an even bigger danger.
Basically, healthcare fraud, or any other kind of fraud, is an intentional misstatement about a material fact that is calculated to produce a financial gain at the expense of the other party. Admittedly, that is quite a mouthful. We will see how this rather complex definition plays out in the common types of COVID-related healthcare fraud which are discussed below.
Fraud charges, which are almost federal charges, have a number of moving parts. So, a Chicago healthcare fraud defense lawyer has several opportunities to successfully resolve these charges. This resolution could be a complete dismissal of charges, a not-guilty verdict at trial, or a plea bargain that includes a greatly reduced sentence.
To date, the Food and Drug Administration has at least tentatively approved four COVID drugs. Since COVID-19 is a flu strain, other treatments, some of them experimental, are available as well. Different manufacturers make these products. Since this industry is so competitive, there is a high probability for kickbacks.
Healthcare companies, such as drug companies, often offer doctors gifts, perks, or money to prescribe certain products and/or not prescribe other products. Sometimes, these payments are subtle. They could include an expensive night out or an interest-free loan. Kickbacks, in any form, are devastating to patients because they taint doctors. At least in part, doctors who receive kickbacks direct treatment based on their own financial gain as opposed to the patient’s best interests.
There is no doubt kickbacks hurt patients. There is some doubt as to whether kickbacks meet the complex legal definition of fraud. The patient, who is technically the fraud victim, may not be a victim at all. If a Chicago healthcare fraud defense lawyer convinces a jury that the prescribed treatment was in the patient’s best interests, all elements of fraud may not be present.
Although the worst of the pandemic appears to be over, thousands of Illini are still diagnosed with COVID every month. To get a share of this business, many doctors and clinics waive deductibles and/or copays. There is nothing legally wrong with these waivers, as long as the medical provider eats the cost. However, if the provider shifts these costs to the insurance company, that is fraudulent.
Shifting healthcare fraud cases are especially common among large, multi-state providers. If a local clinic shifts a few hundred dollars to an insurance company, usually by inflating the cost of the service, no one may notice. If a nationwide clinic shifts several million dollars to insurance companies, someone will notice.
Large healthcare fraud cases are incredibly complicated for prosecutors. Multiple agencies must invest hundreds of hours into the case, not to mention significant financial resources. Furthermore, there is no certainty of a happy ending for prosecutors, especially since the burden of proof is so high.
Quick plea bargains usually are not a good idea. But if a large investigation is involved, an early out-of-court settlement could greatly benefit the defendant. If an attorney negotiates with authorities early on, before investigators have invested substantial resources, a lower fine is usually available.
Medically Unnecessary Services
Uncertainty is the word of the day when it comes to COVID-19. No one is sure what coronavirus strains are active and no one is sure what treatments are effective in which patients. Such uncertainty often gives rise to medically unnecessary services.
Typically, fraud investigators zero in on doctors who order lots of tests or doctors who usually pursue the most aggressive, and most expensive, treatment path.
Of course, excessive tests are not necessarily unnecessary tests. Sometimes, doctors just want as much information as possible. That is especially true in states like Illinois, which do not cap punitive damages in misdiagnosis and other medical negligence claims. A single misdiagnosis judgment could force a medical provider into bankruptcy.
The same thing applies to aggressive treatments. Frequently, insurance adjusters and doctors have very different opinions as to what’s “necessary” in a given situation. Adjusters usually approve the cheapest approach and doctors usually green light the most effective approach.
Uncertainty is also the word of the day in many federal criminal prosecutions. The more uncertain the evidence is, the more likely federal prosecutors are to offer favorable deals. That is especially true since lawmakers recently diluted some mandatory provisions in the Federal Sentencing Act, giving judges and prosecutors more discretion.
The coronavirus pandemic has destabilized the job market. As a result, many hospitals and clinics have lowered their standards, in terms of who does what. That is especially true at nursing homes. For example, a licensed vocational nurse might perform duties that a registered nurse should handle.
Non-physician work is a concern in healthcare fraud matters. According to Medicare and Medicaid billing rules, as well as many private insurance company rules, physicians must perform certain procedures. All too frequently, hospitals and clinics allow nurses or office workers to handle routine outpatient procedures. Then, they bill the government for the cost of the doctor’s time to perform the work.
Such over delegation is not only unlawful and considered a false claim. It also could present real dangers to the patient, if an inexperienced or undertrained staff member is conducting a complex medical procedure.
These rules are sometimes vague. For example, they may state or imply that a physician must supervise the activity. “Supervise” could mean anything from looking over a subordinate’s shoulder the entire time to keeping one’s cell phone on in case of emergency.
Pandemic or no pandemic, upcoding is probably the most common type of healthcare fraud in Chicagoland. In most situations, it is also the easiest type of healthcare fraud to prove. All elements are clearly present in all cases.
Generally, the provider bills the government or insurance company for services that were never rendered. In other cases, the provider bills for a similar, yet more expensive, service than the one which was actually performed.
Frequently, fraudulent intent is difficult to prove in these cases, especially if authorities move in too quickly and few upcoding errors are involved. If the provider continuously upcoded over a period of several months or years, that’s probably not accidental.
Reach Out to a Dedicated Cook County Healthcare Fraud Defense Attorney
In the post-coronavirus world, healthcare fraud investigators are more aggressive than ever. For a confidential consultation with an experienced healthcare fraud defense lawyer in Chicago, contact The Law Offices of Vadim A. Glozman.