U.S. Attorney General Merrick B. Garland turns 70 this month but it’s fair to assume that the volume of work - and intense interest - in his in-tray probably preclude a lengthy celebration.
There are many high-profile cases keeping the U.S.’s chief law enforcer in the headlines. However, slightly more pedestrian but no less of a priority, is his department’s renewed clampdown on healthcare fraud under the False Claims Act (FCA).
The act, which applies to all healthcare providers, is the U.S. government’s primary civil tool to address false claims under federal programmes such as Medicare, Medicaid and Tricare. Under Garland - and Department of Justice (DoJ) civil division chief Brian M. Boynton - actions are increasing. Financial incentives offered to whistle blowers have played a role. So too has data analytics, which Boyton recently said the DoJ was increasingly deploying to generate its own leads.
In the year ended September 2021 healthcare fraud recovery accounted for $5bn of the $5.6bn recovered under the FCA. As mentioned in my previous blog, this followed a record year for new cases filed against the healthcare industry, with 922 FCA actions started in 2020.
In recent years it’s also true that FCA actions have proliferated far beyond the traditional East Coast pharmaceuticals hubs, with US state attorneys across the nation increasingly pursuing cases under laws modelled on the federal legislation.
Some cases are eye-catching. In July, pacemaker and defibrillator manufacturer Biotronik agreed to pay almost $13mn in July to settle allegations that it violated the FCA by paying kickbacks to doctors, with the devices maker also alleged to have treated them to holiday parties, winery tours and lavish meals.
However, as mentioned in another previous blog, many healthcare providers find themselves on the wrong side of the DoJ due to administrative errors during the medical billing process. With healthcare suppliers coming in all shapes and sizes, they are often also ill-placed to defend themselves against the strong arm of the state.
In this climate, demand for medical billing insurance is rising at an estimated 20% to 30% annually. Many healthcare suppliers have come to realise that their historic approach of self-insurance is untenable in terms of the cost and the time it takes to defend themselves against FCA actions.
The FCA practice at Arnold & Porter, where Attorney General Garland worked as a young lawyer and made partner, notes that it isn’t just the monetary stakes that are high but also the threat of exclusion, suspension or debarment.
To that should be added reputational risk, making it imperative that health care suppliers are fully prepared for the current era of increased enforcement.