David Benowitz, a federal healthcare fraud lawyer in DC, answers questions about healthcare fraud cases and prosecution in federal and local court.
David Benowitz: There are a variety of ways that the government prosecutes those cases. What I tend to see a lot of is what starts as, or is detected as, a tax problem. That’s how it comes on the government’s radar. The IRS sees a person either hasn’t paid taxes or something doesn’t look right on a tax return. They then start investigating. What you end up with, if they do an audit or they bring in another law enforcement agency that starts looking at records, is you see a lot of either false billing, improper billing, or coding on bills. That’s what I tend to see.
What’s most common on the healthcare side are miscoding or, unfortunately, falsifying the number of appointments that are done so you have inflated billing. When you talk about the benefits side of this, the ERISA side of this … you tend to see diversion of the plan assets. That’s where I tend to look and see what that looks like. For example, if you see a benefits plan that’s set up and then you look at the bank statements and the profit and loss statements, and you may see that large checks have been written out for personal items. Or, for example, you get into “self-dealing.” Someone paid their uncle to do something. A lot of things … might not constitute a crime, but just don’t look right. That’s what I tend to see a lot of in these investigations. That’s why I find it interesting and challenging, because there’s things that don’t look right that aren’t necessarily illegal. And that’s the challenge, to show the government, “Hey listen, maybe this doesn’t smell quite right, but it’s not a crime.” This shouldn’t result in an arrest or prosecution of somebody. Those are the basic things I tend to see.
David Benowitz: Most of them are prosecuted in federal court. The trend right now is to handle them like you’d handle a drug conspiracy case, in the sense that you have search warrants that are being executed. You have pressurized interview scenarios, where you have law enforcement coming in and saying, “You need to talk to us now,” and try to conduct these interviews by ambush. A lot of documents and computer files get seized and then you have to fight to get them back. That’s what I see a lot of in federal court. Part of the challenge on our side is to show, “You don’t really have anything here to prosecute.” So we try and do that. The other thing that I see a lot of, and again, it’s sort of carryover from the traditional criminal prosecution, is the use of cooperating witnesses. Even in healthcare or benefits cases. The government tries to target someone inside a company and get them to cooperate and to show them how things have been going on, to point them in the right direction. Point them to the right spot. Point them to the bank account that they need to look at. So I see a lot of that as well. Again, there’s not a huge difference in the way they’re prosecuted. In fact, I think … those prosecutions are getting more similar to other types that have traditionally been conducted.
David Benowitz: They’re different because they’re so paper-driven and there are so many documents. They certainly take longer, and it’s a challenge to handle all the documents. You have to have a good system in place on your own to be able to digitize and search through the documents. You need to get an expert and a forensic accountant on board right away to look at the documents to see what you’re dealing with. Because there’s certain things that, unless you’re involved in that particular doctor’s office, for example, you may not know what exactly was going on. So you need someone to piece it together for you sometimes. The government does the same thing, they have their agents who specialize in that area so they theoretically know what they’re looking for or know what to look for. Now that can be a problem for them because sometimes they think they see something illegal when it really isn’t there.
David Benowitz: No, not really. The challenge is to take the mountain of documents that you have and reduce it down to something that a jury, one, can digest without going crazy and, two, can understand. So the goal is to make it, not simple — because jurors aren’t stupid — but to make it palatable, to make it understandable in a way that’s interesting. I’ve done a lot of work with scientific evidence, which I find very interesting, and with DNA evidence, for example, it’s a challenge to take really complicated concepts and translate that into something that a jury can understand. You have to be able to translate it, and also translate it into a way that you can advocate for your client. You have to understand it and essentially process it to the jury so they understand it and understand what you’re getting at. It’s very interesting.
David Benowitz: What you can expect is similar to other investigations, in a sense. You can expect that if your house and office hasn’t been searched yet … that’s going to happen. You need to understand that. Or you may have a subpoena — that asks for essentially all of their records — dropped on you. So you have to be prepared for that. Your family and friends may be contacted for interviews. If you’re a doctor, then your patients may be contacted and the staff in your office may be contacted. A billing company may be contacted. And then, there’s the whole other issue of licensing, particularly with a doctor. You’re going to face an investigation at some point from the licensing board in whatever jurisdiction they’re in. So there’s that whole issue; whether or not they’re going to be able to retain their license. The other thing people need to know is it takes a long time. Unfortunately, with the high stakes that these types of investigations and cases involve, patience is something that you have to have, because these cases take a while because they’re so complicated. Frankly, if you’re doing your job and looking at everything and investigating and looking through the documents, it should take a long time to do a thorough job on the defense side. So I think people just need to be prepared for a long battle.
David Benowitz: You should never destroy anything. That’s the main thing. Everyone’s always advised, “You can’t destroy evidence.” It’s happened, though not that often. I haven’t had it happen, it’s a pretty rare occurrence from what I’ve seen. But people should not start a shredding party at their office. It’s just a bad idea. So … if you happen to know your place of business is going to be searched pursuant to a search warrant, allow it to happen. Be polite, don’t say anything. That’s the best way to handle it. I would not advise staff or employees about how to handle it. I would have a lawyer representing one or more staff members or employees advise them of their options. A client should not be advising coworkers or family, friends, or staff about how to handle something like that. They need to have their own lawyer.
David Benowitz: It generally varies and it depends on a variety of factors. It depends on what’s involved. Are pharmaceuticals involved? For example, when you get into issues of a doctor using pharmaceuticals purchased from outside the United States that aren’t what they purport to be, does someone get hurt? Does a patient get hurt or not get the treatment they need? Again, those are factors you have to consider. In the false billing context, you’re looking at how much money was “lost.” In Medicare or Medicaid fraud, how much did the government “lose” because of the fraud? That drives the potential consequences because the more money that’s lost, or the loss amount that’s involved, the greater the potential sentence. The concept of “loss” is in these cases is very technical and is usually litigated. But this is a type of offense that’s being treated very seriously now, particularly with doctors. In addition to potential prison time, there’s the loss or suspension of licensing. The consequences are very serious.
David Benowitz: I think there’s more of an emphasis on investigating healthcare fraud and other white collar crimes. When there’s more of an emphasis on it, the trend is for more serious sentences.
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