The Office of Inspector General at the U.S. Department of Health and Human Services ("HHS-OIG") announced, on June 30, 2015 (during a health care conference), the creation of a new litigation team that will focus solely on levying fraud-based civil money penalties and excluding providers from Medicare and Medicaid for committing fraud. The point is to give a new team of ten (10) lawyers at HHS-OIG the time and space to bring civil money penalty and exclusion cases without having to also assist on false claims investigations and negotiate corporate integrity agreements.
What can we expect from this new unit? At first, the impact of such a small unit will be limited and scattered across just a few cases. If each lawyer carries twenty cases in his or her case load, that still only equals 200 cases being worked at any time. Most cases will be settled, some will go all the way through a contested hearing, and a few may be declined. This is obviously just a drop in the bucket of potential fraud cases that could be investigated and brought. We should expect press releases on those that are filed or settled. Spreading the word to the provider community will be a large part of the task of the unit.
Defense counsel, as they have done in the past with the unit's predecessor, may seek out the new unit's lawyers to see about trying to resolve a problem at an early stage before, for example, the Department of Justice's prosecutors get involved in the matter. For more routine billing problems, this approach may be appropriate and a fair way to address an issue. But if the new unit's lawyers decide to take a scorched earth approach, then it is unlikely that voluntary referrals will flood their desks. Only time will tell on what culture develops within the new unit.
With time and experience, after the unit has developed a unique personality and approach to cases, we can expect a larger impact. I was involved in a similar government experiment in 1991 when I joined a new unit in the Los Angeles U.S. Attorney's Office that was formed to focus on bringing civil money penalty cases against those committing mortgage fraud. Down the hall, the office was also starting a similar experiment to focus on bringing civil false claims cases against health care providers. These fledging efforts started small. But years later, the impact of the health care fraud prosecutors stationed in all U.S. Attorneys' Offices and at Main Justice bringing civil false claims cases can be felt all over the country. The mortgage fraud effort morphed with time, and its current incarnation is impactful – billions of dollars have recently been deposited into the U.S. Treasury because of the FIRREA civil money penalty cases brought against the large banks and other financial institutions. As for the impact of the health care false claims team, every general counsel of a health care company worries about one of these cases being brought by the government against his or her company.
If this experiment in HHS-OIG catches on and brings some significant cases, then it will be easy for the unit to justify its existence to the Secretary and ultimately Congress. Health care companies and defense counsel will watch to see where the unit's early actions and decisions lead. For now, we cannot expect to see too many cases brought by the unit. But with time, that expectation could change significantly depending on how the unit develops and performs.
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