What Is Involved in a Healthcare Fraud Investigation?

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It’s no secret that the medical industry is highly regulated and scrutinized. Because healthcare fraud costs the government and taxpayers billions of dollars every year, the federal government, as well as the Texas State Attorney General’s Office, the Texas Department of Insurance, and the Special Investigative Units (SIUs) of private payors, devote immense amounts of resources to uncover fraud and prosecute those accused.

Individuals and organizations accused of committing healthcare fraud, either directly or indirectly, can be held liable for civil and / or criminal penalties. In this blog, we will address common reasons why providers may be accused of Medicaid and Medicare fraud, how an investigation may start, your options when responding to an investigation, potential penalties, and a brief overview of some of the federal laws that govern state and federal health care fraud.

Are you a healthcare professional under investigation for fraud or abuse? Call (713) 909-7323 to discuss your case. We can help you sort out the facts and protect your rights.

    The Investigation: How a Healthcare Fraud Case Is Triggered

    • An analyst uncovers a claim pattern that they regard as suspicious; or
    • An insider or whistleblower files a report to authorities (Centers for Medicare and Medicaid Services (CMS); or 
    • A disgruntled patient files a report or complaint.

    I Received a Letter From a State, Federal, or Insurance Plan Fraud Investigator: What Next?

    The Department of Health & Human Services' Office of Inspector General (OIG) employs a host of investigators and auditors who are exceptional at spotting inconsistencies and unusual patterns in purchasing and billing. Private payors also have in-house Special Investigative Units. An investigation often begins with a letter asking you to provide certain documents, such as medical records, or a request to interview you or your employees.

    If federal and state investigators come knocking on your door for an interview, chances are these agencies have already invested significant time and resources investigating your case, and therefore might already have solid evidence against you or your practice. Please take note that anything you say to the investigator may be used to find you guilty of fraud, even if you are told you “are not the target of the investigation.”

    Contact a healthcare attorney immediately. An attorney can help you determine the reason for the records request, advise you on your rights and options, and help you respond to time-sensitive records requests and other demands.

    I’m Being Investigated for Healthcare Fraud. What Are My Rights?

    • You have the right to bring a lawyer to the interview.
    • You have the right to consult with a lawyer.
    • You have the right to remain silent.

    Possible Medicaid and Medicare Fraud Penalties & Consequences:

    • Suspension or loss of a medical license
    • Monetary fines or penalties
    • Restitution orders
    • Recoupment of payments
    • Removal from the Medicare billing program
    • Disqualification or exclusion from receiving Medicaid benefits and/or exclusion from participating in Medicaid as a health care provider
    • Civil judgments and liens on any real property you own
    • Criminal prosecution and a possible incarceration

    Common Examples of Medicaid and Medicare Fraud

    • Upcoding, or using a billing code that results in a higher reimbursement rate than the level of service justifies.
    • Unbundling codes involves using two or more Current Procedural Terminology (CPT) billing codes instead of one inclusive code.
    • Double-billing Medicare or Medicaid and a private company for the same treatment. Double billing also occurs when a provider attempts to charge for the same service by billing using an individual code and again as part of a bundled set of tests.
    • Billing Medicare for appointments the patient failed to keep
    • Billing for services not furnished, supplies not provided, or both, including falsifying records to show delivery of such items
    • Paying for referrals of Federal health care program beneficiaries
    • Improper business arrangements designed to induce referrals
    • Accepting or providing anything of value for referrals for Medicare or Medicaid services
    • Business relationships where compensation is not set at a fair market value or charging excessively for services or supplies
    • Certifying patients for unneeded services
    • Failure to make timely repayment when an overpayment is identified (60-Day Rule)

    Strategic Representation in Healthcare Fraud Investigations

    The regulations governing Medicaid and Medicare are highly complex. Surprisingly, a majority of incidents are legitimate misunderstandings or billing errors that result in allegations of Medicare or Medicaid fraud.

    At Hendershot Cowart P.C., we understand that a violation creates exposure not only to legal penalties, but also repercussions that can jeopardize a provider’s medical license, certifications, and career. We will represent you at every step of a civil fraud investigation – beginning before allegations arise.

    If state or federal government agencies do conduct investigations, we will prepare a strong and aggressive defense. We are well-versed and experienced in handling civil investigative demands, subpoenas, interviews, document production, hearings, and trials.

    We regularly advise healthcare clients on the most complex healthcare regulations affecting providers in Texas and nationwide, including:

    We can also advise you on the creation, implementation, and maintenance of compliance plans designed to prevent and resolve problems before they become investigations.

    Medicare, Medicaid, and insurance fraud investigations can have serious consequences, including criminal charges, exclusion from Medicare and Medicaid, fines, and sanctions against you or your practice. The earlier you contact us, the sooner we will begin investigating and preparing your case. Call (713) 909-7323.

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