Healthcare Providers Face Intensifying Fraud Scrutiny in 2014

Healthcare organizations should be prepared to face increasing scrutiny in 2014, according to “Healthcare Fraud and Abuse Review 2013” published by Nashville, Tenn.-based law firm Bass, Berry & Sims PLC, which cites a near doubling of whistleblower lawsuits filed in the past five years and continued significant fraud recoveries by the government.

The government recovered a total of $4.3 billion in all fraud, abuse and audit recoveries in fiscal 2013, according to a recent announcement by the U.S. Department of Justice, and whistleblowers received $324.2 million from those recoveries.

“Heightened whistleblower activity under the False Claims Act is fueling the government’s fraud recoveries, even as more providers are increasingly willing to litigate these issues with the government,” said Matthew Curley, a member of the firm’s Healthcare Fraud Task Force, in a statement. “Healthcare organizations can expect continued scrutiny in 2014. They should be increasingly focused on ensuring compliance with relevant healthcare fraud laws and regulations, especially involving their physician relationships.”

“One of the most significant issues to watch in 2014 will be the ramifications of the government’s recent $85 million settlement with Halifax Medical Center in Florida,” said Brian Roark, head of the firm’s Healthcare Fraud Task Force. The settlement was over allegations that the hospital system violated the False Claims Act by submitting claims to the Medicare program that violated the Physician Self-Referral Law, commonly known as the Stark Law. “The theory of liability pursued by the government marks a dramatic shift in applying the Stark Law to Medicaid, and not just Medicare claims. Expansion of the Stark Law to Medicaid claims certainly will result in heightened risk under the False Claims Act for providers,” he said.