John LeBlanc of Manatt, Phelps & Phillips recently discussed healthcare fraud and some of the latest trends in this area. He said that the loss associated with healthcare fraud could be as high as $80 billion.
“Part of what we’re trying to do is identify areas where it’s growing so that people can take action to prevent it.”
LeBlanc said he believed the problem was growing, not only concerning fraud but also waste. “A lot of these are very high-dollar cases,” he noted. However, he added that the area of pharmaceutical fraud is one where there have been some sizable recoveries lately. He reiterated that one of the big problems is that it can be challenging to identify where fraud and waste are occurring.
LeBlanc said there are several areas the government is focusing on: improper relationships between physicians and pharmaceutical companies, services not provided or ordered, and drug pricing. He noted that Medicare and Medicaid reimbursement levels for those types of things had been reduced.
“We’re starting to see more of these types of cases because the government has just said, ‘Enough is enough,'” LeBlanc explained. For example, he said that companies are now being told that their employees need to follow proper procedures if they want to contract with the federal government. Another area of focus is on increasing the government’s knowledge of what is going on.
“Remember, the government has limited resources,” LeBlanc said. “It can only be in so many places at one time.” He noted some areas where compliance efforts had been weaker, which was a focus of the federal healthcare oversight agencies, including the Office of Inspector General.
“The government is looking at the types of contracting rules that it has not looked at in the past,” LeBlanc added. For example, he said there are now more requirements for compliance programs within companies to deal with potential fraud and waste.
LeBlanc noted that health care entities could do some things internally to help prevent fraud and waste. For example, companies should establish and implement good compliance programs and train their employees. Fraud and waste can only be prevented by establishing a robust internal compliance program, LeBlanc said.
“Companies need to conduct audits of their operations to see what is going on,” he added. “They don’t want to wait until there is a problem.”
In terms of recovering funds, LeBlanc described what could happen when a case is settled. “Once a settlement occurs, the government will set up a fund and look to recover that money,” he said. For example, the US Department of Justice takes cases involving billions of dollars to the US Treasury’s Judgment Fund, which then directs monies from the Judgment Fund to pay for the settlement.
“What we find is that the DOJ and the US Attorney’s Offices typically work pretty closely with us,” LeBlanc said. He explained that they typically provide information on cases, including internal data and information from whistleblowers. “They don’t give us everything, but they give as much as they can,” he said.