Exposing Fraud in Healthcare Industry CLE/CPE

Exposing Fraud in Healthcare Industry CLE/CPE

SEGMENT 1:
Joshua A. Levy , Principal
Cunningham Levy LLP

• The need for a HEAT Strike Force at DOJ.  Recently, CMS spends roughly $500b on Medicare each year, and 3-10% of that is said to be fraudulent.  But only less than 1% in fraudulent funds is recouped each year by the entire government.  Part of the problem is CMS.  CMS (through its constellation of MACs, ZPICs and RAs) does not adequately identify, stop and deter fraud.  
  • MACs cannot identify fraud other than poorly completed paperwork on claims submissions. The Prompt Payment Rule requires MACs to reimburse claims within 14 days, so long as the paperwork is correctly submitted.  Real fraudsters don’t mess up on the paperwork; they’re often submitting perfect paperwork for quick cash payments, even though the underlying claim is bogus.  MACs are therefore nearly useless as fraud tool.
  • ZPICs cannot gain real-time access to MAC data, meaning the ZPICs cannot quickly identify fraud.
  • ZPICs and RACs (now RAs) are in different geographic zones, using different software, looking at different issues.  
  • Slow to use Big Data.  
• HEAT’s use of Big Data.  FBI analysts, working with HHS OIG analysts, have used big data to identify health care fraud trends (where CMS has not).  For example, when the use of certain drugs or devices should no longer be used according to the standard of care, per peer reviewed journals and the like, HEAT analysts have hunted for rampant continued use of such drugs/devices, often revealing phony patients and crooked doctors.
• The heartland of HEAT prosecutions.  HEAT prosecutors primarily investigate and prosecute fraudulent health care providers, DME suppliers and – to a lesser extent – drug companies.  Mass arrests in different cities have stopped fraudulent Medicare coding practices (not previously identified and ground to a halt by CMS).  While HEAT prosecutions have made an impact from the standpoint of criminal deterrence, they have been ineffective vehicles for helping the US recoup fraudulently spent funds.  To wit, HEAT prosecutions – since their existence – have identified a total of roughly $6 billion in health care fraud; have resulted in hundreds of convictions; and yet have recovered only about $200,000 in criminal restitution because the defendants frequently have laundered the money.  (From the standpoint of recoupment of funds, the government thus remains highly dependent on corporate-insider whistleblowers to file FCA cases against solvent defendants.)

SEGMENT 2:
David Stone, Managing Partner
Stone & Magnanini LLP

• HEAT’s Mission:  An explanation of HEAT’s purpose and mission and how the FCA is being used by HEAT as a tool to recover taxpayer dollars.
• The FCA:  A brief overview of the use of the federal and state False Claims Acts in combating Medicare and Medicaid fraud and the coordinated efforts with the State Medicaid Fraud Control Units.   
• HEAT’s Accomplishments:  In 2014, the Department of Justice recovered $2.3 billion in health care fraud alone.  Since January 2009, the Department of Justice has recovered over $23 billion through False Claims Act cases, with over $14.8 billion of that coming from cases involving health care fraud.  Indeed, many of the largest civil FCA recoveries have involved health care fraud. 
• Recent Examples:  A discussion about some of the recent Strike Force Enforcement Actions that are listed on the HHS website.

* False Claims Act cases under the Stark Law, Medicare and life science companies. The U.S. Supreme Court is slated to decide the case of Kellogg Brown & Root v. U.S. ex rel Carter. While that case deals with defense contracting, it could have significant impact on the healthcare industry as it deals with the first-to-file rule and the tolling of the 6-year statute of limitations. In addition, the Open Payments data release is likely to drive up False Claims Act qui tam suits since enterprising plaintiffs' attorneys can analyze the data for potential claims. Also the "worthless services" theory of recovery under the False Claims Act despite the 7th Circuit rejection of that theory in U.S. ex rel Absher v. Momence Meadows Nursing Center. There are actually lots of sub-subjects within the broader False Claims Act subject.

SEGMENT 3:
Michael Summerhill, Partner
Freeborn & Peters LLP

• The Foreign Corrupt Practices Act (FCPA) for life science companies operating in emerging markets.  2014 saw numerous enforcement actions brought against life science companies, and these actions are expected to increase. 
• Self-Disclosures of potential Stark and anti-kickback violations to both the Centers for Medicare and Medicaid Services and the Office of Inspector General of the Dept. of Health & Human Services.  This is probably the most attractive subject for me personally.  CMS proposed a 60 day rule in 2/2012 that requires all Medicare providers to report overpayments and return the money to CMS within 60 days of identifying them.  The final rule from CMS is expected later this year.  Question concern how far back must a provider look.  This is of particular concern given the prevalence of consolidation in the healthcare industry as potential overpayments are invariably discovered during the “due diligence” phase of a proposed merge. 

Exposing Fraud in Healthcare Industry CLE/CPE

Michael SummerhillPartnerFreeborn & Peters LLP

Mike Summerhill is a Partner in the Litigation Practice Group of Freeborn & Peters LLP in Chicago.  Mike has extensive appellate litigation experience and has successfully argued matters and drafted briefs in successful appeals before the U.S. Court of Appeals for the Seventh Circuit and the Illinois Court of Appeals and the Supreme Court of Ohio. At the trial court level, Mike has defended clients in many class action suits and multi-district proceedings involving a variety of industries including healthcare, software, medical devices and consumer products. He has also litigated complex mass torts and commercial disputes, product liability, securities and consumer fraud actions and arbitrated commercial disputes before the American Arbitration Association.

Joshua A. Levy PrincipalCunningham Levy LLP

Joshua A. Levy co-founded the law firm of Cunningham Levy LLP and represents companies, non-profits and individuals in litigation and government investigations. He has an expertise in health care fraud statutes, such as the Anti-Kickback Statute, Stark Laws and the Food Drug and Cosmetics Act.  Mr. Levy has been named a Super Lawyer in White Collar Criminal Defense for 2013, 2014 and 2015.  He teaches seminars on “Health Care Fraud and Abuse” and “Congressional Investigations” at the Georgetown University Law Center.  He served as counsel to U.S. Senator Charles E. Schumer of New York and counsel to the U.S. Senate Committee on Homeland Security and Government Affairs.  Mr. Levy clerked for U.S. District Court Judge Joan A. Lenard, Southern District of Florida.  JD, 1999, University of Michigan Law School.  Masters of International Affairs, 1999, Columbia University.  BA, 1994, Columbia University.

David StoneManaging PartnerStone & Magnanini LLP

David S. Stone is the Managing Partner of Stone & Magnanini LLP of Short Hills, New Jersey, which he co-founded in March 2009.  Previously, Mr. Stone had been the Administrative Partner of the New Jersey Office of Boies, Schiller & Flexner, LLP, where he headed that firm’s national False Claims Act practice group.

Mr. Stone has represented both individual and corporate clients in complex fraud related litigation in federal and state courts, trial and appellate courts (including the United States Supreme Court) located throughout the United States and internationally.  Mr. Stone has been recognized as one of the premier trial and appellate lawyers in the country and has been involved in five of the ten largest healthcare recoveries in the past decade including  GlaxoSmithKlein ($800 million),  Bristol Myers Squibb ($425 million), Cephalon ($350 million) and Medco ($165 million).  In addition, while at Boies Schiller and afterwards, Mr. Stone acted as co-counsel with David Boies on various litigation related to the separation of Maurice Hank Greenberg from AIG which culminated in a multi billion dollar verdict in the matter of SICO vs. AIG.  Mr. Stone also served as chief trial counsel in a patent infringement lawsuit against one of the leading network providers which culminated in one of the top intellectual property jury verdicts in the state of NY.  Mr. Stone focuses on complex fraud litigation matters which span the areas of intellectual property, appellate law, tax and finance, securities, anti trust, regulatory enforcement and white-collar criminal defense.  Recently Mr. Stone was selected to argue the case of  the United States Ex. Rel. Carter v. Halliburton and KBR in the United States Supreme Court.  Mr. Stone has also been a frequent commentator on Fox and Fox “Business” News and various other networks on financial and healthcare fraud matters.

Mr. Stone has also served as outside general counsel for Telebrands, one of the worlds largest As Seen on TV companies and in that capacity has dealt with numerous media organizations including advertising public relations and negotiation of media appearances.

Mr. Stone was a founding name partner of the firm Freedman & Stone and a founding partner of the firm Stern & Greenberg with the former U.S. Attorney and District Judge Herbert J. Stern.  He also served as outside General Counsel of YankeeNets, LLC, where he was co-trial counsel with David Boies in a successful suit to recover the New York Yankees' television rights from Madison Square Garden Network. 

Mr. Stone has been a guest speaker and panelist at numerous conferences, including Taxpayers Against Fraud,  the American Association of Nurse Anesthetists, the Minnesota Association of Nurse Anesthetists, the Medical Society of New Jersey and the Medical Society of Colorado. Mr. Stone also participated in the presentation of testimony on antitrust and healthcare before Congressional Subcommittee on Antitrust and Healthcare.

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