Posted on April 7, 2020 in FCA
Written by: David Honig
On March 13, 2020, President Donald Trump declared a National Emergency Declaration in response to the COVID-19 pandemic. Congress is passing new emergency legislation daily, and the states are declaring emergencies and issuing orders out of governors’ offices and Departments of Health.
While the global extent of the crisis is unprecedented, the country has experienced major crises in the past, and one thing is certain: once the pandemic passes and once billions, even trillions, of dollars have been spent, there will be a reckoning. The federal government, and its state counterparts, will review their spending in search of the inevitable fraud and abuse.
Department of Justice Focused on Potential for Abuse
The False Claims Act’s (the “FCA’s”) original purpose was to deter and punish fraudulent government contractors during the Civil War. During the current crisis, Attorney General William Barr instructed the Department of Justice (the “DOJ”) attorneys to “remain vigilant in detecting, investigating, and prosecuting wrongdoing” related to the pandemic.
Joining the DOJ’s calls for active prosecution, whistleblower attorneys and advocacy groups have actively called for further focus on fraud—and health care fraud particularly—urging the DOJ to be “prompt and aggressive” in its response.
Unfortunately, the FCA is both effective and too broad—often catching well-meaning providers in its attempts to root out knowing fraud. Given its breadth and the urgent focus on federal funding during the COVID-19 pandemic, historical context paints a picture of what might be in store for providers on the frontlines.
Lessons from Previous Crises
In the aftermath of Hurricane Katrina a task force was established specifically to investigate fraud. That group screened over 26,000 complaints of fraud and more than 900 defendants were charged with fraud in 43 judicial districts. These allegations ranged from bribery and corruption to embezzlement and charity fraud. Pulling from this experience and similar emergencies, like the 2009 H1N1 crisis, as health care providers continue to respond to the COVID-19 pandemic, it is important to stay on the right side of the FCA. Past enforcement following crises point to these areas are likely to see increased whistleblower and DOJ scrutiny:
- Requesting out-of-pocket fees that exceed the maximum regional Medicare allowable charge directly from patients;
- Selling supplies provided by the federal government;
- Advertising products by making fraudulent claims and an implied endorsement from the federal government;
- Diversion of legitimate prescriptions to illegal channels;
- Improperly charging for vaccinations, if they become available;
- Off-label use of drugs and devices;
- Documentation of services provided; and
- Use of counterfeit or adulterated vaccines if a vaccination becomes available.
And while past efforts provide some guidance, the COVID-19 pandemic’s scale will likely create even more focus points. The patchwork of federal, state and local responses, including waivers of some credentialing and licensing requirements, is certain to create pitfalls for providers and opportunity for whistleblowers. The biggest warning for health care providers is a general one – don’t take the emergency waivers from the various governmental entities as carte blanche. They are each far more specific than the headlines touting them.
Health care provider’s first priority remains treating their patients and ensuring the safety of their staff. Working alongside their government and legal partners, there’s opportunity to navigate the ever-evolving guidance and declarations to leverage the law for increased care.