John LeBlanc of Manatt, Phelps & Phillips focuses on healthcare fraud and abuse cases in both civil and criminal arenas. In this interview, he shares his insights on how healthcare fraud has evolved over the years and what we can expect next.
Q: What is the biggest change we’ve seen in healthcare fraud over the last ten years?
A: The answer to that question is multifaceted. On one hand, there has been an increase in prosecutions by both federal and state government authorities. This seems like a simple and obvious thing, but it’s worth noting that prosecutors don’t like to take on cases unless they can easily win them. Therefore they need proof of an overt act (or acts) that constitute a crime, and they must be able to prove it beyond a reasonable doubt.
Q: What kind of proof do prosecutors look for?
A: In the civil context, they want to see evidence that supports a straightforward, common-sense fact pattern. For example, the auditing firm makes a false statement, and they have evidence to show it’s wrong. No one disputes that payment was made for an item or service that wasn’t provided. That kind of conduct satisfies the government’s burden. Still, it’s relatively unusual in complex fraud cases because several people are usually involved and, typically, multiple claims to Medicare or Medicaid. Even if someone wants to take responsibility for their part in the case, it’s challenging to do that when everyone else is pointing the finger at another person or entity.
Q: What about criminal charges?
A: In the criminal context, prosecutors have successfully taken down entire operations, not just a single defendant. They would have been satisfied charging only one or two people who supervised or carried out the fraud in the past. Now they’re going further into the organization to charge accountants and lawyers who set up the scheme from the beginning.
Q: The government has made it clear that it isn’t just going after people who directly carry out fraudulent activities. Why is that?
A: CEOs can hire and fire employees, but they don’t do the work of the company day-to-day. When you look at direct evidence of criminal intent, there isn’t always a smoking gun or a recording of someone saying, “I’m committing this crime.” That’s why prosecutors are asking questions earlier in the process to determine which employees knew what they were doing and whether or not they intended to deceive Medicare or Medicaid.
Q: What does this mean for defendants?
A: Defendants who don’t cooperate with federal authorities can expect serious charges. If there is a pattern of conduct over time, you can’t just plead guilty to one count and expect leniency. The prosecutor will want information on everyone else involved in the case, not just that single individual.
Q: What about individuals who are wrongly accused?
A: If you’re innocent, you should not feel compelled to accept a plea bargain. Federal authorities have been using deferred prosecution agreements more often in recent years, which means the government allows them to pay a fine and fulfill other requirements while they’re on probation instead of going to prison. In return, the prosecutors add information about the case to their file, but they don’t charge that individual with anything. It’s important to understand that this is not an admission of guilt. The individual can still go into court and fight the case if they so choose, but it might hurt their chances in the future when pleading guilty could have put them in much better standing with the court.