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Assistant U.S. Attorney General identifies fraud trends, targets healthcare executives

In American Bar Association conference speech, Leslie R. Caldwell highlights target areas for federal prosecutors

Federal prosecutors are moving fraud enforcement into the C-suite, according to remarks made by Assistant Attorney General Leslie R. Caldwell during a speech delivered at the American Bar Association's 25th Annual National Institute on Health Care Fraud. Just as the Department of Justice (DOJ) has pursued charges against executives for financial fraud, healthcare executives will be held accountable for fraud schemes that occur under their watch.

This was one of many trends highlighted by Caldwell's recent speech that points out the responsibility of healthcare executives to "implement and enforce rigorous compliance policies and programs," according to an analysis by attorneys at Baker Hostetler. C-suite executives facing criminal fraud investigations can expect to face more rigorous scrutiny from prosecutors in the future.

In her speech, Caldwell noted that over the last several months, the DOJ has opened more than a dozen corporate investigations, steering more resources toward these criminal probes.

"The Criminal Division has a long record of holding executives responsible for their criminal wrongdoing in cases involving financial fraud," Caldwell said. "You should expect to see us building on that record in the field of healthcare fraud."

Caldwell also addressed issues surrounding corporate cooperation, clarifying that a corporation will only receive credit for cooperating with federal prosecutors if they "conduct a thorough internal investigation and turn over all available evidence of wrongdoing," including any criminal misconduct at the executive level. Simply responding to a grand jury subpoena does not constitute cooperation, she said.

Reflecting on the work the DOJ has done to infiltrate and prosecute fraud schemes in home health, durable medical equipment, and psychotherapy services, Caldwell said that Medicare Part D, laboratory services, hospital-based services, and hospice care are among the leading healthcare fraud trends currently. Access to CMS billing data along with parallel civil and criminal investigations has allowed prosecutors to identify evolving trends quickly and accurately.

Recent fraud investigations and prosecutions support the notion that feds are targeting executives, FierceHealthPayer: AntiFraud previously reported. Perhaps most notably, Earnest Gibson III, president of Riverside General Hospital in Houston was convicted of a $158 million Medicare scam involving psychiatric hospitalization program services. In February, Jonathon Wade Dunning, former CEO of two non-profit health clinics in Birmingham, Alabama was arrested on a 112-count indictment tied to a $14 million fraud scheme.

For more:
- here's AAG Leslie R. Caldwell's speech
- read the Baker Hostetler analysis

Related Articles:
Top executives embroiled in healthcare fraud around the country
C-suite fraud: Cases and deterrents
Texans busted for fraud involving psychiatric care