Cohen ppt - assets.hcca-info.org · Scheme to defraud: A scheme is merely a plan for the...

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10/7/2013 1 A PROSECUTOR’S VIEW Society of Corporate Compliance & Ethics HEALTH CARE COMPLIANCE ASSOCIATION October 11, 2013 Assistant U.S. Attorney Nelson P. Cohen Fraud and Corruption Section U.S. Attorney’s Office [email protected] 412.894.7336 FEDERAL PROSECUTIONS *Law Enforcement Agencies *Investigative Tools *Parallel Proceedings STATUTES CASES TRENDS CRIMINAL INTENT *Considerations * Burden of Proof *Classic Fraud

Transcript of Cohen ppt - assets.hcca-info.org · Scheme to defraud: A scheme is merely a plan for the...

Page 1: Cohen ppt - assets.hcca-info.org · Scheme to defraud: A scheme is merely a plan for the accomplishment of an object. Fraud is a general term which embraces all the various means

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A PROSECUTOR’S VIEW

Society of Corporate Compliance & EthicsHEALTH CARE COMPLIANCE ASSOCIATION

October 11, 2013

Assistant U.S. Attorney Nelson P. Cohen

Fraud and Corruption Section

U.S. Attorney’s Office

[email protected]

412.894.7336

� FEDERAL PROSECUTIONS

*Law Enforcement Agencies

*Investigative Tools

*Parallel Proceedings

� STATUTES

� CASES

� TRENDS

� CRIMINAL INTENT

*Considerations

* Burden of Proof

*Classic Fraud

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� FBI

� HHS OIG

� MFCU

� FDA OCI

� IRS CI

� POSTAL INSPECTION SERVICE

� POSTAL OIG

� DOL OIG

� DCIS

� VA OIG

� OPM OIG

� RRB OIG

� OIG Subpoena

� Agency Actions-Prepayment Review

� Civil Investigative Demand (FCA, § 1345)

� Authorized Investigative Demand (Criminal)

� Grand Jury for Documents and Testimony

� Proffer Session

� Search Warrant

� Forfeiture

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� Definition

� Advantages to the Government� Different statute of limitations

� Different investigative tools

� Combined effort to recover/recapture funds

� Risk of treble damages and fines per claim

� Lower burden of proof for civil action

� Rule 6e problems

� Global settlements

� Materials obtained through search warrants

� Documents obtained through OIG subpoenas and AID subpoenas

� Documents and deposition transcripts obtained through CIDs and civil discovery

� Documents obtained voluntarily from witnesses

� Material obtained through consensual monitoring, undercover contacts

� These are only criminal tools, but results can be shared

� All non grand jury interview reports

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� 18 U.S.C § 287 – False, Fictitious & Claims

� 18 U.S.C § 286 – Conspiracy to Defraud With Respect to Claims

� 18 U.S.C § 1001 – False Statements

� 18 U.S.C § 371 – Conspiracy

� 18 U.S.C. § 1341– Mail Fraud

� 18 U.S.C. § 1343 – Wire Fraud

� 18 U.S.C. § 1349 -- Conspiracy

Non Health Care and Health Care Crimes

§24. Definitions relating to Federal health care offense

(b) As used in this title, the term ‘health care benefit program’ means any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any

individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or

contract.

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� 18 U.S.C § 669 – Theft or Embezzlement in

connection with Health Care

� 18 U.S.C § 1518 – Obstruction of Criminal

Investigation of Health Care Offenses

� 18 U.S.C § 1035 – False Statements Relating to Health

Care Matters

� 18 U.S.C § 1347 – Health Care Fraud

� Knowingly and willfully

� Executes or attempts to execute scheme

� To defraud (public/private) health benefit program

� In connection with delivery of health care benefits, items or services

Whoever knowingly and willfully executes, or attempts to execute a scheme or artifice--

(1) to defraud any health care benefit program;

or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the

money or property owned by, or under the custody or control of, any health care benefit program, in

connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or

both.

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18 U.S.C. 1347

� Scheme to defraud:

� A scheme is merely a plan for the accomplishment of an object. Fraud is a general term which embraces all the various means by which human ingenuity can devise and which are resorted to by an individual to gain an advantage over another by false representations, suggestions or suppression of the truth, or deliberate disregard for the truth.

� Materiality:

� The false or fraudulent representation (or failure to disclose) must relate to a material fact or matter. A material fact is one which would reasonably be expected to be of concern to a reasonable and prudent person in relying upon the representation or statement in making a decision.

� Part A schemes: Cost reports, DRG, home health, nursing homes

� Billing for services not rendered; Impossible Day

� Billing for Cadillac but delivering Chevy

� Medically unnecessary services: DME, lab or office- bogus diagnosis

� Billing doctor or therapist services rendered by others

� Prescription fraud: patient driven, but …

� Mislabeled/misbranded drugs

� Claims tainted by kickbacks

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� Wound care covered by nursing homes thru Part A

� Part B covered if a surgical procedure was done by a physician on the wound

� Omega companies telemarketed surgical dressings to out of state facilities from Western PA

� Omega had 150 employees, delivered products; collected a CMN to support every claim

� Telemarketers trained to overcome customer concerns by claiming that PA Part B carrier will pay

� Core of the crime was that Omega knowingly billed for uncovered products

� Claim forms showed a surgical procedure by a physician on a date certain, but no procedure occurred

� 34 shell companies with no employees to stay under the radar

� Assignment of benefits on receipt didn’t match up� No co-pay billed� 3 search warrants by 4 law enforcement agencies,

interviews of more than 65 witnesses, 80 boxes� Statistical samplings to determine loss $18 million� $14 million recovered, 4 convictions

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� Penn Medical & Dileo Cardiology

� Arterial Blood Gas Tests; CMN’S

� Hopwood Trailer, Holiday Inn, Buttermilk Lane House

� Furniture, Jewelry, Cars

� New York Life Insurance

� Triple Benefit: Wife, Partners, IRS

DiLeo & McMonagle, P.C.

CHECK #4748

Amount: $2,410.00

Deposited to Penn

Medical

Amount: $2,410.00Penn Medical

Check #783

Payable to

Dominic W. DiLeo

Amount: $2,410.00

Memo: Equipment Return

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� Black Lung Program, DOL OIG

� Uniontown Lab, Steve C., David P.

� John’s Proffer--Body Wires at Midnight

� Schedule 2‘s: Percodan & Percocet

� Fabricated Medical Records

� 6 Week Trial; 55 Witnesses; 121 Months

WHEN IT RAINS IT POURS

� WILL THE PROSECUTION BE COST EFFECTIVE?� Direct or indirect return on your investment?

� WAS A VALUABLE SERVICE PROVIDED?� And was it covered?

� ARE THE RULES CLEAR?

� SHOULD INSURER HAVE CAUGHT IT?

� DID AN INSURER SUFFER A LOSS?� The stronger the intent to defraud, the smaller the loss needed.

� A NET PROFIT FOR THE SUBJECT?

� PILLAR OF THE COMMUNITY?

� IS THERE AN INNOCENT EXPLANATION?

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� Everybody does it.

� Criminal acquittal

� They paid.

� Auditors never questioned it.

� The government knew.

� Advice of counsel

� No one was hurt.

� Specific intent to defraud required

� Proof beyond a reasonable doubt

� No specific intent require

� Preponderance of the evidence

CRIMINAL CIVIL

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� BADGES OF FRAUD� DESTROY RECORDS

� ALTER DOCUMENTS

� KNOWINGLY UPCODE

� BILL FOR SERVICES NOT REDERED

� SUGGEST PERJURY

NO INNOCENT EXPLANATION

� What is the Medicare Fraud Strike Force?

� The DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state, and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing� http://www.hhs.gov/news/press/2011pres/

02/20110217a.html

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� Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the DOJ and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country� http://www.hhs.gov/news/press/2013pres/05/20130

514a.html

� July 26, 2013 – Recovery of $9.5M related to fraudulent Medicare claims for ambulance transports in Houston, TX� http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fac

t-Sheets/2013-Fact-Sheets-Items/2013-07-26-2.html� May 12, 2013 – Charges against 89 defendants for allegedly

participating in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided; conspiracy to submit $223M in fraudulent billing� http://www.hhs.gov/news/press/2013pres/05/20130514a.ht

ml� Oct. 4, 2012 – Charges against 91 defendants (doctors, nurses, and

other licensed medical professionals) in 7 cities; $429.2M in false billing� http://www.cms.gov/Newsroom/MediaReleaseDatabase/Pre

ss-Releases/2012-Press-Releases-Items/2012-10-04.html

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� Apr. 4, 2012 – Strike force efforts result in recovery of over $4B in FY 2011

� http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2012-Press-Releases-Items/2012-04-04.html

� Feb. 28, 2012 – Dallas, TX arrest of physician, office manager, and owners of home health agencies; $375M health care fraud scheme� http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-

Releases/2012-Press-Releases-Items/2012-02-282.html

� Designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings

� Comprised of federal government, state officials, private health insurance organizations, and other health care anti-fraud groups:

• America’s Health Insurance Plans• Amerigroup Corporation• Blue Cross and Blue Shield Association• Blue Cross and Blue Shield of Louisiana• Centers for Medicare and Medicaid Services• Coalition Against Insurance Fraud• Federal Bureau of Investigations• Health and Human Services Office of Inspector General• Humana Inc.• Independence Blue Cross• National Association of Insurance Commissioners

• National Association of Medicaid Fraud Control Units• National Health Care Anti-Fraud Association• National Insurance Crime Bureau• New York Office of Medicaid Inspector General• Travelers• Tufts Health Plan• UnitedHealth Group• U.S. Department of Health and Human Services• U.S. Department of Justice• WellPoint, Inc.

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� July 26, 2011 speech by Kathleen Sebelius on private-public partnership:� “For example, a bad actor may bill Medicare for 8 hours

of care one day, then bill two other insurance companies each for 8 hours on that very same day. Seen separately, as they are now, these billings could appear normal. But by sharing information across payers, we can bring this potentially fraudulent activity to light so it can be stopped. Public and private payers alike -- we all have a stake in making sure cheaters don’t undermine our health care system.”

� http://www.hhs.gov/secretary/about/speeches/sp20120726.html

� Implemented by CMS on July 1, 2011 as complement to President Obama’s Campaign to Cut Waste

� What is predictive modeling?� Innovative technology that can detect potential fraud and

abuse by simultaneously analyzing multiple data sources, such as provider billing patterns and the distance between service location and a beneficiary’s address, for a very large number of claims

� What does it do?� Identifies fraudulent Medicare claims prior to payment

instead of relying on post-payment data� Uses algorithms and analytical processes that look at

Medicare claims – by beneficiary, provider, service origin, and other variables – to identify potential problems and assign an “alert” and “risk scores” for those claims

� http://www.hhs.gov/asl/testify/2011/07/t20110712h.html

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� Also used by banks, credit card companies, insurance companies, and other consumer entities to identify potential fraud before it occurs

� Peter Budetti, M.D., Director of CMS Center for Program Integrity:� “Using the most up-to-date technologies and adopting best

practices across the nation’s health care system, we have a better chance of finding fraudulent and abusive providers before they even start billing Medicare or other health insurance.”

� Donald Berwick, M.D., CMS Administrator:� “Preventing fraud is more effective than the old ‘pay and chase’

model of fighting fraud after a sham provider has been paid and disappeared.”

� http://www.hhs.gov/news/press/2010pres/12/20101216a.html

� Additional information:� Triggers effective and timely administrative actions

by CMS as well as referrals to law enforcement when appropriate

� Innovative risk scoring technology applies a combination of behavioral analyses, network analyses, and predictive analyses that are proven to effectively identify complex patterns of fraud and improper claims and billing schemes

� http://www.hhs.gov/asl/testify/2011/03/t20110303a.html

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THE END

Assistant U.S. Attorney Nelson P. Cohen

Fraud and Corruption Section

U.S. Attorney’s Office

[email protected]

412.894.7336