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Top Ten 2023: Fraud & Abuse Issues to Watch

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Based on AHLA’s annual Health Law Connections article, this special series brings together thought leaders from across the health law field to discuss the top ten issues of 2023. In the fifth episode, Shannon Sumner, Chief Compliance Officer and Office Managing Principal, PYA, speaks with Chris Sabis, Member, Sherrard Roe Voigt & Harbison PLC, about some of the top fraud and abuse issues to watch out for. They discuss government enforcement activities and priorities, DOJ's increased focus on health IT and electronic health records, and the government’s approach to sub-regulatory guidance. Sponsored by PYA.

Watch the conversation here.

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Speaker 1:

A H L A is pleased to present the special series highlighting the top 10 health law issues of 2023, where we bring together thought leaders from across the health law field to discuss the major trends and developments of the year. Support for A H L A in this series is provided by P Y A, which helps clients find value in the complex challenges related to mergers and acquisitions, clinical integrations, regulatory compliance, business valuations, and fair market value assessments, and tax and assurance. For more information, visit PYA pc.com.

Speaker 2:

Welcome everyone to our podcast, highlighting fraud and abuse issues to what? I'm Shannon Sumner, a principal and chief compliance Officer for P y A and our national office, and I lead our regulatory compliance practice. Joining me today is one of the authors of ALA's top 10 issues in health law, Chris of Shard, and right here in Nashville. So thank you, Chris, for joining me today. Um, can you tell the audience a bit more about yourself and your practice?

Speaker 3:

Sure. Um, thank you Shannon. Uh, it's a, it's a pleasure to be here and thank you, obviously to A H L A for, for, uh, letting me contribute to the, um, to the article and, and here on the podcast, uh, I lead the Government Compliance and Investigations Group, uh, here at Sheard Avoidant Harbison, uh, where I focus on representing, uh, individuals and companies, uh, under investigation or responding to subpoenas from federal and state government agencies. Uh, healthcare is my largest focus area, but I also have, uh, experience in, uh, areas like transportation education, uh, and general government procurement, um, from when I was an Assistant United States attorney here. Um, we also represent clients in white collar, uh, criminal investigations. Um, I do some general litigation and healthcare litigation in areas like antitrust and general business disputes. Uh, and finally, I'm a rule 31 listed mediator here in Tennessee. Uh, so I do some work as mediator and our arbitrator, uh, and I'm listed with, uh, a H L a's ADR service.

Speaker 2:

Awesome. Well, thank you, Chris. Um, wanna get right into the article that you contributed. So in your article you referenced the DOJs 5.6 billion in total settlements and judgements related to healthcare fraud in 2021. And we all know that due to covid, um, government activities shifted a bit due to the lockdowns. However, do you foresee a recalibration of government enforcement activities in, in this year in 2023?

Speaker 3:

You know, I, I, I don't foresee, and, and lord knows I'm not clairvoyant, uh, but I don't foresee a, a major shift coming as it relates to, to healthcare, um, which is, which is obviously the focus of, of what we're talking about. Um, of that, you know, when that 5.6 billion number hit, a lot of people noted that it was, uh, a rather large uptick over the, the couple of years prior. Um, but when you look behind that, that large kind of eyecatching number a little bit, uh, over 3 billion, uh, dollars of that number, uh, came from two opioid related settlements. Um, and much of, of the rest that doj, uh, focused on in its annual press release, uh, continued, uh, trends from from before and trends that, that I discussed a bit, uh, in my article. Um, issues like managed care, um, you know, health IT issues related to cybersecurity and eh h r systems, uh, and of course, kickbacks, which, you know, still are create, uh, make up a very sizable, uh, amount of, of DOJs fraud enforcement efforts, particularly in the healthcare arena. Um, I think we may see some additional focus on P P P fraud, uh, as those those matters kind of wind themselves through the system, um, you know, particularly any kean matters that, that take some time to investigate. Um, but I think much of that is gonna depend on how aggressive, uh, the department is, uh, in going after those cases. Um, you know, for example, uh, many of those cases, you know, in, in, in with healthcare, uh, companies and, and, and individual work individuals working in healthcare and outside of healthcare, you know, many of those P P P cases to date have focused on issues like false tax returns or some other obviously false data submitted to the government. Um, I'm very interested to see how far, uh, DOJ is going to go, uh, in investigating whether, for example, certain P P P loans were really needed by the recipient. Um, and I think that that how aggressive a stance, uh, the department takes on that could dictate, uh, how much of, of that, um, uh, how much we see those efforts grow, uh, in the next year or two.

Speaker 2:

Well, you know, I feel like there's been a lot of activity over the last couple months. And so there was the recent back in September of 2022, the, the DOJ memorandum and the title of it was, um, further revisions to Corporate Criminal Enforcement policies following discussions with Corporate Crime Advisory Group, what a title. Um, but that combined with the OIGs revisions of certain, uh, language and, and certain, uh, corporate integrity agreements regarding really the role of compliance officers and compliance committees. And I'm really thinking of the, the biotron and the vision quest, um, CIAs over the last couple of years. But do you feel that 2023 we'll see an increase in government enforcement activity, particularly through corporate integrity agreements?

Speaker 3:

Yeah. And, and these documents have raised some, some, some themes that have kind of, you know, been, been just under the surface for, for years, going back to, to when I was in a U S A and, and we talked about, uh, talked about them there. Yeah, I, I don't, again, I don't know about, you know, overall enforcement activity, but I certainly, uh, do see an increased focus, um, on the nature of, uh, corporate criminal investigations, um, both inside and outside of the healthcare space. Um, a, a focus on, on how DOJ is going to keep, um, both individuals and corporations accountable for what they see as as criminal conduct. Um, you know, this, this discussion goes back, uh, in a large degree to the Yates memo back in 2015, uh, which, which focused a lot on individual liability, uh, in criminal matters, um, as well as in, in civil fraud enforcement matters. Uh, and there have been a, a number of, of changes and focus kind of back and forth between, uh, the administrations. Um, but, but I think that, that these recent documents indicate a, a signal, again, toward a focus on, on more aggression in this, in this space. Um, you know, the Monaco memorandum to, to give it a a, a shorter title, um, a and the changes, uh, to the CIA language seem focused on effective compliance programs and individual accountability. Uh, there's also a lot of discussion about corporate cooperation, uh, which is a topic that is spoken about frequently, but has not always been well defined, uh, and often means something different to prosecutors than it does to defense attorneys. Uh, and so, you know, kind of thematically here, I think a hs, uh, h h s, uh, is clearly contemplating an expanded role for compliance committees, um, through the, uh, the new language in the CIAs, the reference, uh, I think doj, uh, is focused on the importance of timeliness in corporate cooperation and criminal investigations. Um, you know, one of the goals of having corporate cooperation is to be able to, uh, hold the individuals, uh, who perpetrated the alleged fraud responsible. And certainly having as much information as, as you can, as a prosecutor in a timely manner, is gonna make, uh, taking those steps a lot easier. Um, and it's not just about timeliness, but, you know, voluntary disclosure of records. There's a very interesting, uh, section in that memo to me that talks about, um, records, uh, that could be seen as protected by data privacy laws in foreign countries. And the fact that the department is going to recognize willingness to provide those documents rather than, you know, uh, uh, shield them through those, through those data privacy laws, I think that's a really interesting passage, and it's gonna be interesting to see how the department, um, uh, focuses on that particular area. Um, and there's, you know, the memo also focuses on the importance of corporate compliance history, uh, in seeking resolutions, um, which, which again, will be interesting how the government factors in prior, uh, alleged, uh, compliance issues. And, and one thing thing that, that I like seeing in there, and that I think most defense attorneys will like seeing is, is a focus on transparency, uh, and the department being willing to, to share information about its, uh, corporate cooperation policies, uh, uh, with, with the public and, and with the defense bar. And we'll just have to see how much transparency we actually get it.

Speaker 2:

Yeah, that's a good point. And, and I know from, from us working with, certainly with compliance committees and, and boards, it really comes down to, to a lot of it relates to risk, right? For the organization. And so in your article you mentioned about the DOJs increased focus, and this is certainly a big risk area for many of our clients and the areas of health IT and, and electronic health records. But, um, what, what I wanted to know a little bit more about, as you mentioned about the concept of substative electronic health record fraud. So can you talk about that and maybe provide some examples?

Speaker 3:

Sure. Um, and this is, you know, a kind of a, a, a name that, that I kind of came up with for, for some stuff I've been writing and, and presentations I've given for, for A H L A. Um, it, it's, uh, betrays my lack of creativity, I guess, in coming up with cool names. But basically, you know, we've watched, uh, E H R related fraud, uh, investigations and, and settlements kind of evolve over the years. Um, you know, when, when I was in a U S A and, and full disclosure, I, I participated in a couple of these settlements. Uh, we had, uh, focus on, uh, E H R donation fraud, uh, and, you know, potential potential kickbacks related to E H R donations. Um, you know, then, then we got more into kind of the kickbacks, uh, space with regard to meaningful use payments, um, and, and that type of thing. And, and to me, kind of the next place I see this going is where you're focusing on more of the, the substantive nature of, of fraud and how the HR contributes to it. Um, one example, and, and, you know, I, when I was in a U S A, I worked, uh, on a matter that had some of these allegations, but just speaking generically, um, upcoding, uh, I think would be a big area. So, so for example, if you are a home health agency and you have to fill out an Oasis form, um, you know, if you have a, an electronic health record system, and that system can make suggestions, um, for changes, uh, that you could make to your oasis form for say, the sake of consistency, uh, you know, are we gonna be looking at allegations from whistleblowers or from the government that, uh, those, uh, changes are leading to upcoding of, of the OASIS form, uh, leading to higher payments, uh, to the, to the home health, uh, agency. There were, there were actually some of these allegations, uh, in the keam, uh, that led to the recent modernizing medicine settlement out of the District of Vermont. Uh, and, and I was very curious in waiting to see what that, what that resolution was gonna be to see if it, it touched on any of those issues. And it, it didn't, it actually went in in different directions. Uh, but there have been a number of, of examples historically, um, you know, somewhat smaller ones, but even going back, you know, a, a few years where, where you have an, an electronic health record system that, uh, allegedly, uh, has been part and parcel with the actual, you know, fraudulent claims that have been submitted. And it seems to me like that's a next logical direction for this type of, of E H R related fraud investigation to go.

Speaker 2:

Yeah, that's definitely an area that would encourage certainly our compliance professionals to make sure that that's, that's front and center related to their compliance work plans, particularly if you're implementing a new electronic health record, wouldn't you say?

Speaker 3:

Yeah. It's, it's one of those things that, that I think everyone needs to be aware of on the front end, right? I mean, not, not just the, the medical practice, for example, that's gonna be implementing a new system. But obviously if you are, uh, an E H R uh, developer, uh, you certainly want to be aware of anything that, that could be even wrongly interpreted as a compliance related issue. Um, you know, there is nothing wrong with revenue optimization. Revenue optimization is a good thing. Uh, but, you know, any tool that can be used for revenue optimization purposes, or at least I would think most of them have the ability to be abused and, and, and distorted. Uh, and so compliance training on, on, on that and, and monitoring how, uh, systems are being employed, uh, I think is is critical to avoiding, you know, if not, if not, trouble in litigation, certainly expensive investigation costs down the line.

Speaker 2:

Yeah, absolutely. Um, so I wanna, um, shift gears a little bit. So, um, you know, we understand that historically the DOJ has relied on what's called subregulatory guidance in a variety of ways. However, back in 2017 and 2018, um, the Trump administration issued memorandum kind of limiting the DOJs reliance on this subregulatory guidance, but then that stance flipped again with the Biden administration when he issued an executive order instructing agencies to really remove those policies limiting regulatory action. And we know this was the catalyst to the Garland memo, but do you see this as, um, perhaps foreshadowing future DOJ enforcement actions? Um, for example, many of us were dealing with the provider relief funding, and those terms and conditions were based on ever-changing SUBREGULATORY guidance. But where do you, where do you see that, um, that that use of subregulatory guidance coming up in this year and then the following years?

Speaker 3:

It's one of my favorite, uh, topics, so thank you for asking about it. Uh, I do think that, that those changes in, in the Garland memo, uh, may foreshadow, uh, what we're gonna see in some investigations, uh, in, in the False Claims Act front, um, in in particular areas, um, you mentioned provider relief funding, um, P P P, maybe another one, uh, where you have this dynamic situation like the pandemic where, you know, the agencies are just trying to move as quickly as possible. There's a significant amount of, of, of subregulatory guidance flying around. Uh, and, and in those situations, I do think that you may see a, a renewed focus on, um, using that type of material in, in bringing, uh, fraud allegations more broadly. Um, and, and I am certainly not, this is not a unanimous viewpoint by any means, um, but more broadly, my view is that the number of instances where, um, the, the approach to subregulatory guidance is gonna make a real difference, uh, in, in say your typical healthcare fraud investigation is, is somewhat limited. Um, I, I actually wrote about this for, you know, one of those other bar associations, uh, a little while ago and kind of called it a tempest in the teapot. Uh, because as you've said, you had, you know, a, a change in, in, in the approach to subregulatory guidance during, during the Trump administration with the sessions and, and brand memos. You have a, a switch back, um, with, um, with the Garland memo. But if you'd look at, at the overall policies of those two memos, they're not incredibly different. Um, I think one thing that demonstrated this was, uh, section one dash 20 of the Justice Manual, um, which again, full disclosure, I I, I worked on drafting when I was, uh, it was at doj. It's, you know, why this is one of my favorite topics. Um, if you look at that section, uh, it kind of clarified and expanded on the brand memo. And, and a lot of the language in there is not all that different from what you see in the Garland Memo. Uh, what I find interesting is that after the Garland memo came out, if you went and took a look at the, the Justice Manual as it's published on do J'S website, section one dash 20 is gone, um, section one dash 19, which kinda has an overall subregulatory guidance policy is still there, but section one dash 20, which was meant to put some meat on those bones, uh, during, uh, the, the, the Trump administration, uh, is gone. And so I will be very curious over the next year to see whether the department, uh, writes something to replace section one dash 20, um, and tries to put more meat on the Garland memo, or whether it just kind of lets that float and sticks with the language in the Garland memo and says, this is our policy, and so much of this is, is case by case, um, that we're just gonna leave it at that. Um, so I think that's one interesting development to potentially look for. But again, on, on your kind of standard, you know, run-of-the-mill healthcare fraud investigation, to the extent that such a thing exists, um, I, I think that that for the most part, um, the, the differences are going to turn out to, to be less critical than, than sometimes they're made out to be.

Speaker 2:

Interesting. So, looking into your, your crystal ball that you have, um, what are some likely enforcement priorities in 23?

Speaker 3:

Well, my crystal ball's always pretty hazy, but, but I think that the, like I said, I, I don't think there's gonna be a, a massive amount of change, you know, what's passed is prologue. Um, I think that remains true, particularly when you've got, um, so much of, of DOJs fraud enforcement activity, um, uh, you know, relying on, and based on the actions of whistleblowers and the ke tams that they bring, uh, you know, opioids I think is gonna be continue to be an area. We've had major settlements in that space. A lot of litigation is still going on, um, you know, on the, on the opioid front, um, in this country. And I think that's gonna continue. Uh, I think managed care, uh, you're gonna continue to see, um, you know, risk score, uh, litigation and settlements. Uh, I don't think that's going anywhere anytime soon. Um, despite numerous settlements in that area over the last few years, it seems to continue to come up, uh, as an area of investigation. And I think that's gonna gonna continue. Um, health, it, you know, we've seen a number of civil and criminal enforcement actions related to cybersecurity, uh, in the last, uh, couple years at doj, D E H R matters, uh, that I was just talking about. Uh, I think that's gonna be a, a focus area on both the civil and criminal sides. And, and of course, you know, wrapped into all of that, uh, and more is that general kickback, uh, uh, theme. Uh, I obviously a significant portion of, of False Claims Act cases in particular that DOJ handles are, are kickback cases. Um, I think you're gonna see that continue. Um, and it's, especially in the areas of health it and, and opioids as I just mentioned, um, there's gonna be, uh, always kickback investigations related to, to those areas.

Speaker 2:

So speaking of that, I understand from your article that there is a, uh, interesting case addressing the scope of, of Annie Kickback actually pending here in the Middle Tennessee district. So can you speak, speak to this?

Speaker 3:

Well, I find it interesting anyway, and I, I hope some other people do. And, and, and again, just to be open, I, I represented one of the defendants in this case, uh, for a time. I'm, I'm not involved in it now. Um, and everything I say will be public information, but, but there is a case pending down here. It's, it's, um, actually a, a, a, um, Medicaid case that is pending in federal court. Uh, the, uh, a number of states have, have intervened in her proceeding with the litigation. The federal government has not intervened. Um, it's called United States Xra, uh, false, uh, vapper. And, uh, in this case, uh, at a motion to dismiss stage, uh, the court, the trial court, the district court, uh, ruled that the states, the intervening states could enforce the federal any kickback statute, uh, through their respective state false claims acts, uh, in relation to, uh, Medicaid beneficiaries incurred medical expenses. Uh, so their I payments, these are, these are non-covered services that Medicaid patients can use, whatever of their own money they have to pay for because they're not covered by the Medicaid program. Um, that, that, you know, the, the court ruled that, um, that the states could enforce the a k s in relation to those IM e payments, uh, for services that, you know, as I said, were not covered by the state Medicaid program. Uh, I, I have not seen a precedent to this. Um, I think it's a really interesting application of the, any kickback statute, and I think it has potential implications for the breadth of, of, of a k s applicability. That's, you know, that case is still in litigation and to me, it's, it's an important one, important one to watch, um, to see where that goes. If it gets to a summary judgment stage and, and beyond, uh, how, how broadly, uh, the, the language in the federal a K s is applied to a situation like this could have implications down the line.

Speaker 2:

So I don't think, uh, 23 will be dull. Um, there will be a lot, a lot of areas that we will continue to monitor and hopefully to write more on and more podcasts. And so, Chris, thank you once again for your insight regarding the top health law issues in 2023 and for joining me here

Speaker 3:

Today. Thank you, Shannon. I really enjoyed it. And, and thank you for, for doing this as well. And thanks h l

Speaker 2:

Absolutely. And thank you for h l a.

Speaker 1:

Thank you for listening. If you enjoy this episode, be sure to subscribe to a H L A, speaking of health law, wherever you get your podcasts. To learn more about a H L A and the educational resources available to the health law community, visit American health law.org.