Le­gal: en­force­ment ahead

Modern Healthcare - - Special Report - —Gregg Blesch

Quite a bit of po­lit­i­cal noise was made in 2009 about pre­vent­ing, find­ing and pros­e­cut­ing health­care fraud, and all sec­tors of the in­dus­try can rea­son­ably ex­pect to feel the crack­down in 2010.

Fed­eral and state agen­cies are gun­ning for fraud and abuse in all its forms, in­clud­ing flyby-night crim­i­nals run­ning HIV in­fu­sion scams, hos­pi­tals en­gaged in pro­hib­ited fi­nan­cial ar­range­ments with physi­cians and multi­na­tional phar­ma­ceu­ti­cal and de­vice com­pa­nies pay­ing kick­backs and oth­er­wise il­le­gally mar­ket­ing their wares to physi­cians.

This has been true for the past few years, but this year will be de­fined by health­care re­form—whether sort­ing out the pro­vi­sions of a new law or com­ing to terms with what Democrats failed to pass.

“The en­forcers step in and try to com­pel be­hav­ioral changes that could not be ac­com­plished through the leg­isla­tive process,” says Frank Sheeder, a part­ner in the law firm Jones Day.

New re­sources and at­ten­tion to health­care fraud by HHS and the U.S. Jus­tice Depart­ment will gain trac­tion through­out the year, with mul­ti­a­gency fraud “strike forces” ex­pand­ing into ad­di­tional cities and the agen­cies get­ting a bet­ter han­dle on sift­ing through claims data to find fraud.

Changes made to the False Claims Act through the Fraud En­force­ment and Re­cov­ery Act of 2009 have armed whis­tle-blow­ers and gov­ern­ment in­ves­ti­ga­tors with new tools they’ll bring to bear in 2010. The law al­lows the Jus­tice Depart­ment to del­e­gate the au­thor­ity to ap­prove civil in­ves­tiga­tive de­mands in False Claims Act in­ves­ti­ga­tions, which pre­vi­ously re­quired the per­sonal sig­na­ture of the at­tor­ney gen­eral.

The le­gal com­mu­nity widely ex­pects that au­thor­ity to be given to U.S. at­tor­neys. Also as a re­sult of the law, the Jus­tice Depart­ment is al­lowed—though not re­quired—to share the fruits of those de­mands with other agen­cies and whis­tle-blow­ers, pos­si­bly breath­ing life into weak law­suits. Es­sen­tially all of this means “eas­ier ac­cess to in­for­ma­tion with fewer hoops to jump through,” Sheeder says.

Last year, an­titrust lawyers pre­dicted the in­com­ing and yet un­known Obama team would as­sume a tough stance on en­forc­ing com­pe­ti­tion laws, which has come to pass.

Art Lerner, a part­ner in the law firm Crow­ell & Mor­ing, says health in­sur­ance com­pa­nies might get un­wel­come at­ten­tion from the Jus­tice Depart­ment in 2010—Obama of­fi­cials have crit­i­cized their pre­de­ces­sors as too lax on the in­dus­try— and the Fed­eral Trade Com­mis­sion will con­tinue in­ves­ti­gat­ing and chal­leng­ing hospi­tal merg­ers.

Health­care re­form will gen­er­ate busi­ness for an­titrust lawyers, too. “When­ever the com­pet­i­tive dy­nam­ics change and the money is changed, there’s the po­ten­tial for grown-ups ar­gu­ing about money,” Lerner says. “An­titrust will prob­a­bly be a tool in th­ese dis­putes.”

Lerner: In­sur­ers may face un­wel­come at­ten­tion from feds.

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