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Fraud trends: FCA cases, physician pay will loom large in 2016

Law firms review fraud activity in 2015, highlight keys for the coming year
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With fewer False Claims Act (FCA) recoveries, some might say 2015 was a down year for federal fraud enforcement. But attorneys across the country say federal policy changes and FCA trends will keep fraud concerns high on the government's radar in the coming year.

FCA claims, and whistleblower actions in particular, remain as "the government's most potent enforcement tool," according to a report released by Mintz Levin PC. Attorneys from Polsenelli PC echoed similar predictions for 2016 in a webinar, adding that physician compensation will be a focal point for the government, and FCA enforcement is likely to expand at the state level.

Both firms pointed to notable policy changes in 2015, including the Yates memo and the Department of Justice's (DOJ) focus on corporate compliance. Polsenelli attorney Asher Funk argued that the Yates memo would not create significant changes in FCA cases, indicating the language was "aspirational" and saying healthcare providers engaged in settlement talks aren't likely to sign off on an agreement that doesn't protect everyone in the company.

Polsenelli attorney Jeffery Fitzgerald also highlighted physician compensation agreements as a trending focus area for government investigators. In September, Adventist Health System and North Broward Hospital District paid nearly $190 million to settle separate allegations that the hospitals overpaid employed physicians. In both cases, hospitals were willing to take a loss on physician payments if it meant improved margins on the hospital side.

"That type of thought process raises some very significant Stark Law issues," Fitzgerald said in the webinar. "The takeaway from the cases this year has to be that the government is looking at practices that take losses year over year."

Corporate compliance will be a key element in future enforcement. In addition to a guidance document on corporate compliance released the by the DOJ in April, the agency also hired a corporate compliance counsel that is expected to a higher level of scrutiny for the healthcare industry.

In 2016, the fraud community is anxiously awaiting a decision from the Supreme Court, which will to rule on a case involving "implied certification" later this year. The Supreme Court's ruling could have "big ripples for everyone in the provider community," according to Fitzgerald, since implied certification has been an avenue for significant fraud enforcement at both the federal and state levels.

To learn more more:
- here are the Polsenelli webinar materials
- read the Mintz Levin report

Related Articles:
Supreme Court to hear FCA case on 'implied certification'
In the choppy waters of FCA recoveries, whistleblowers still steer the ship
Amid increased federal enforcement, compliance guidelines offer foundation for fraud prevention
OIG to hospitals: Involve boards to strengthen compliance
DOJ's new compliance counsel to provide 'reality check'
Health systems cough up stiff settlements for overpaying docs