Bass, Berry & Sims attorney Scott Gallisdorfer authored a two-part article series published on The Compliance & Ethics Blog highlighting key updates in healthcare fraud compliance and enforcement, including insights from the firm's annual 2023 Healthcare Fraud & Abuse Review and updates thus far in 2024. The Compliance & Ethics Blog is published in partnership between the Society of Corporate Compliance and Ethics (SCCE) and the Health Care Compliance Association (HCCA).
The current landscape of healthcare fraud enforcement can be aggressive, Scott noted in the first article, meaning healthcare companies and investors should remain consistently vigilant. The increasing complexity of the regulatory environment has contributed to new compliance risks across various sectors of the industry. False Claims Act (FCA) statistics, provided by the U.S. Department of Justice (DOJ), continue to reflect substantial government recoveries and whistleblower activity.
Enforcement activity related to pandemic relief programs and funds has become especially active with regulators increasingly targeting larger organizations and more complex schemes. The DOJ has also broadened its reach through the use of the Controlled Substances Act (CSA), holding providers and other healthcare organizations accountable for mismanaging controlled substances.
"As most healthcare compliance professionals well know, regulatory and enforcement threats are constantly evolving," remarked Scott. "In that environment, it is essential that healthcare organizations understand what enforcement activity is already underway—and what regulators are signaling may come next—to align their compliance efforts to meet emerging threats."
Scott's second article focused on proactive compliance strategies and prevention of risk. With the increasing presence of cyber threats, the DOJ has established the Civil Cyber Fraud Initiative to address cybersecurity violations through the False Claims Act. Not only should healthcare organizations ensure HIPAA compliance, but they should also develop robust frameworks to ensure the security of all kinds of sensitive data.
Medicare Advantage is another area rife with compliance risk as government spending on Medicare Part C now exceeds $450 billion annually. In addition to Medicare Advantage plans, vendors and providers are now being scrutinized as well, as inaccurate diagnosis coding has led to an increase in Medicare Part C reimbursements.
The DOJ has also been ramping up scrutiny of private equity, focusing on the potential role of third-party investors in alleged healthcare fraud schemes.
"Recent enforcement activities, as well as public pronouncements by DOJ, reveal at least five new focus areas likely to shape compliance risk going forward," Scott said. "Organizations exposed to these trends must take steps now to ensure they are ready should a regulator or whistleblower come calling."
The two-part article series was published by The Compliance & Ethics Blog; the articles are available online at the links below:
- "Pandemic Aid and Controlled Substances Highlight New and Emerging Fraud Compliance Risks" (July 3, 2024)
- "Cybersecurity, Medicare Advantage and Private Equity Bring New Healthcare Fraud Issues to the Fore" (July 10, 2024)
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