Just in case the HEAT initiative, FERA, and the myriad of other government health care fraud efforts were not enough, last week Senator Leahy and the Senate Judiciary Committee proposed new legislation aimed at health care fraud. The Health Care Fraud Enforcement Act of 2009 was introduce last week by Senator Ted Kaufman and co-sponsored by five other members of the Senate Judiciary Committee.
This bill is designed to give the government even more tools to fight health care fraud. The bill increases the criminal penalties for most health care fraud offenses. If passed, it would also make it clear that claims submitted that arise out of a violation of the Anti-Kickback Statute are violations of the False Claims Act.
The intent of this amendment is to make it possible to sue entities, under the False Claims Act, who pay kickbacks, even if they do not submit the claim for payment themselves. However, the amendment simply says that "a claim for items or services that are provided in violation of [the Anti-Kicback Statute] is a violation of the false claims act." In most cases, an Anti-Kickback Statute violation is actionable under the False Claims Act. It seems that this is an unnecessary addition. It might also make the innocent third party who submits the bill liable under the False Claims Act even if they were not a party to the kickback. This seems unlikely, because they would not meet the intent requirement under the Anti-Kickback Statute or other criminal statutes, because they would not know about the "downstream conduct."
The statute also adds the Anti-Kickback Statute to the definition of federal health care fraud offenses. This expands the scope of remedies available to the government when prosecuting these offenses. The remedies now include: making the proceeds of the offense subject to forfeiture, making obstruction of these offenses a crime, include these offenses as specified unlawful activity for purposes of money laundering, and authorize the use of administrative subpoenas for the production of documents or authentication testimony. This may be the change with the largest impact, because of the resulting availability of forfeiture.
Given that there are more criminals getting into health care fraud and that this trend appears to be in part due to the much milder sentences for health care fraud, taking steps to increase health care fraud penalties seems like a good step to combat this problem. Clearly incorporating the Anti-Kickback Statute into the false claims act does not seem like such a great idea, because it most likely will not reach the parties the Senators wanted to reach. Furthermore, the False Claims Act already has a very wide reach and, under current case law, often reaches anti-kickback violations. Adding this language to the anti-kickback statute may not change anything. It might, however, lead to unintended consequences that make it even harder for law abiding providers to operate. For example, they may become liable under the False Claims Act for recklessly disregarding "downstream" conduct.
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