Fraud & Abuse - September 2003
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OIG Increasingly Targeting Physicians in Fraud & Abuse Enforcement Efforts

D. McCarty Thornton, former Office of Inspector General Chief Counsel, recently spoke on future trends in fraud and abuse enforcement to members of the National Health Lawyers Association. Thornton identified anti-kickback violations as the hottest area of risk for healthcare providers. The government is increasingly focusing on investigating physicians, Thornton said. Current "hot areas" of enforcement are kickbacks, Stark self-referral prohibitions, pharmaceutical marketing, clinical research (including NIH grants and sponsorship of research), quality of care, and the Medicare secondary payor law.

Thornton gave a list of top ten tips to avoid OIG enforcement actions:

1. No personal favors to referral sources
2. Don't stick out of the crowd—Thornton warned that the government often looks for "low hanging fruit" as an easy target for investigation
3. Be wary of going along with the crowd that seems to be taking risks
4. Analyze proposed arrangements by thinking about the basic purposes of the statute—Thornton said "the government is unlikely to go after a deal unless there is some sort of harm to [a federal healthcare] program or the patients"
5. Get as close to a safe harbor as possible or document business reasons why full compliance is not possible
6. While paying/receiving fair market value is not an official safe harbor because the government views it as too open to interpretation, it still can afford excellent overall protection if good faith fair market value is documented (Thornton recommended following OIG guidance for valuing)
7. Preserve credibility and avoid obstructing justice by shredding or altering documents, withholding information, or telling half truths
8. Check compliance on an ongoing basis once you have assessed a particular deal's risks
9. Document, document, document
10. "Greed is not good"—excessive compensation or return on investments is a red flag to investigators.

Thornton noted that enforcement has declined over the last several years as funding has leveled off for enforcement activities. One reason for the decline cited by Thornton was that compliance efforts are finally taking effect. While healthcare fraud was hot in the 1990s, Thornton predicts a shift in enforcement priorities to corporate governance issues and terrorism in this decade. However, because the government is still focusing on fraud in the healthcare industry, healthcare providers should continue to maintain a commitment to corporate compliance programs and be vigilant about the latest risk areas.

Source:  American Health Lawyers Association, Health Law Highlights

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