Dealing with records destruction in fraud investigations

A New Jersey chiropractor destroyed evidence sought by authorities investigating her billings for potential fraud, the FBI announced last week. Mary Jean Negri pleaded guilty in federal court to one count of obstructing investigation of a healthcare offense.

In 2012, she discovered her billing practices had drawn the attention of the FBI and U.S. Attorney's Office. Suspecting the government wanted to examine her appointment books, she discarded them. Now Negri faces penalties of up to five years in prison and a maximum fine of $250,000, the announcement stated.

This case follows news that Florida's Halifax Health destroyed thousands of patient records knowing they pertained to an ongoing federal investigation and lawsuit, as FierceHealthcare reported.

For a federal law enforcement perspective on how to manage these types of setbacks, FierceHealthPayer: Anti-Fraud spoke to Ted Radway, an assistant U.S. attorney for the District of Columbia.

"Obviously we prefer to have all the documents," Radway said, "and in a criminal trial some things simply can't be proven beyond a reasonable doubt if documents are missing or destroyed. But if we prove that a provider deliberately destroyed documents, we can charge the provider with obstruction of justice. And there's a specific statute for obstructing federal healthcare fraud investigations," he told FHPAF.

Radway explained that in a civil or administrative proceeding--depending on the level of document destruction--the parties may be able to get what's called an "adverse inference instruction" where a judge or jury can legally say, "the defendant destroyed these documents, so we'll assume they would have proved the government's or payer's case."

Document loss may be less of a problem going forward in view of the move to electronic health records. Authorities can dispatch a forensic team to recover data providers think they've destroyed, Radway said.

Radway's office has seen cases where unscrupulous providers throw "charting parties" where they gather people in a room to alter, destroy or fabricate medical records. Typically this occurs in response to a subpoena or payer audit, he explained.

Then the government must decide whether to serve a subpoena for records and take the risk that the provider will alter them, or just take the records--for example, by using a search warrant--without allowing opportunity for alteration.

"There are pros and cons for each method," Radway said, "and sometimes we use both. If a payer is investigating a true criminal, they should work with law enforcement so we can use tools such as the search warrant to go in, seize and preserve records."

Further, if payers have authority in provider contracts to do unannounced site inspections, Radway advised insurers to consider using that authority if they believe a provider may tamper with records.

"But go in prepared with a big enough team and concrete goals, because you're likely only to get one shot at the full, unadulterated records," Radway said. "If you're entitled to take the patient records, take the originals and leave copies for the provider."

Sometimes a provider releases a document to an insurer as part of an audit, but the same document looks different when the provider gives it to federal authorities later. If the payer preserved the records, Radway said, the government can easily prove they were altered. Further, "this tips us off that there's a likely consciousness of guilt," he explained.

"I'm not saying we in government want to use insurers as our agents," Radway emphasized. "But if an SIU runs its own investigation, there's nothing wrong with collecting records, finishing the investigation and turning it over to law enforcement to pursue criminally or civilly. We welcome that kind of cooperation."

For more:
- here's the FBI announcement

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