Are Feds Now More Serious about Prosecuting Fraud?

Are Feds Now More Serious about Prosecuting Fraud?

IS IT A COINCIDENCE THAT, IN THIS ISSUE OF THE DARK REPORT, we cover two related developments, both involving the federal government’s efforts to control healthcare fraud and abuse?

First, you’ll read about the new federal rule scheduled to take effect on Nov. 4. It gives federal healthcare investigators new powers to exclude individuals and organizations that pose undue risk of fraud, based on their current or previous relationships with those who have committed healthcare fraud. The Centers for Medicare and Medicaid Services (CMS), which issued the new rule, calls this new power its “affiliations authority.” The new rule also introduces the term “sanctioned entities.”

Will this be bad news for the bad guys, the fraudsters, and scamsters who repeatedly hit the government health programs with fraudulent claims? CMS now has the power to ban individuals and organizations from billing government health programs for between 10 and 20 years. Previously, it could only exclude an individual or entity for a maximum of three years.

The second related development is the federal crackdown on Medicare fraud, with indictments of 35 individuals, at least six of whom are laboratory owners. Announced on Sept. 27, federal prosecutors say these individuals collectively and illegally were paid $2.1 billion from federal health programs. Most of these claims involved genetic testing performed on Medicare beneficiaries.

For decades, clinical laboratory executives and pathologists decried the illegal practices of certain medical laboratory operators and others who induce physicians to order unnecessary or inappropriate lab tests simply so they can submit often-outrageously-priced lab test bills to Medicare, Medicaid, and private health insurers. Honest lab professionals regularly wondered why federal prosecutors seemed reluctant to pursue obvious cases of fraud, or accepted a negotiated civil settlement instead of a criminal indictment. In those cases, the culprits were free to organize a new company and commit fraud all over again.

Given that recent weeks have brought us the new Medicare rule governing associations, along with what federal prosecutors say is the largest Medicare fraud case in history, might it be true that federal officials are ready to take a much tougher stance against healthcare fraud and abuse?

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