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DOJ Medicare Fraud Strike Force to Arrive in Texas This Summer - What Healthcare Providers Should Know

April 21, 2008

Formed in early 2007 to target suspected fraudulent Medicare billing in Southern Florida, the United States Government's Medicare Fraud Strike Force has zealously pursued its mandate.  In fact, published reports claim that the Strike Force was responsible for almost 25% of the Medicare fraud charges brought nationwide in 2007.  Touting the Strike Force as a resounding success, the United States Department of Justice has said that it will bring its operations to Texas by summer of 2008.  The Strike Force is coming to Texas at the same time that Texas and federal authorities are increasing their civil, criminal, and administrative enforcement activities.  Unfortunately, many law-abiding healthcare providers will almost certainly find themselves swept into the Government's increasingly aggressive investigations.

The Strike Force primarily selects its targets through billing data analysis of information provided by Medicare Program Safeguard Contractors and review of claims data taken from the Health Care Information System.  Even innocent statistical anomalies resulting from unique aspects of a particular patient base or practice can trigger investigations.  Erroneous billing practices that do not reach the level of criminal fraud may still subject the provider to significant civil and administrative penalties including exclusion from participation in federally funded healthcare programs.

Ensuring that providers have both a specific program in place to prevent erroneous billing and a comprehensive compliance program are usually the most important steps in avoiding or mitigating potential risk.  Many Government actions are based on allegations that the provider miscoded its services.  Effective and enforced compliance programs can both minimize the risk that miscoding will occur and provide a defense against allegations that the provider knowingly or recklessly submitted claims for miscoded services.

Providers should have procedures in place for responding to investigative demands, subpoenas, and search warrants.  It is sometimes possible to obtain favorable resolution before a criminal, civil, or administrative action is begun.  However, such result is usually only possible when the provider's response is timely and well-coordinated.

While the Strike Force has, to date, concentrated on the infusion therapy and durable medical equipment industries, the Justice Department and Centers for Medicare and Medicaid Services have stated that their goal is to increase accountability and decrease the presence of fraudulent providers in the Medicare system.  Therefore, healthcare providers should not assume that their particular practice area is at any lower risk of audits, investigations, or prosecutions.