New OIG litigation team focuses on civil money penalty and exclusion cases

On Tuesday, representatives from the United States Department of Health and Human Services Office of Inspector General (OIG) announced the creation of an OIG litigation team that will focus specifically on civil monetary penalties and exclusion cases. The announcement was made to attendees at the annual meeting of the American Health Lawyers Association (AHLA).

Devoting a designated legal team for this area of enforcement has been on the OIG's wishlist for some time, but the agency only recently obtained the funding to do it, Tony Maida, a partner with McDermott Will & Emory LLP, said in an exclusive interview with FierceHealthPayer: AntiFraud (pictured right). Maida previously served as a senior official in the Office of Counsel to the Inspector General. 

"It opens up another avenue of potential government enforcement," he said. "People have had to worry about criminal fraud charges and False Claims Act litigation, but there is a third leg to that enforcement stool, which is OIG administrative enforcement actions."

The OIG did not respond to email and telephone requests for comment; however, an AHLA brochure detailing the conference's itinerary indicated that Robert M. Penezic, senior counsel in the Administrative and Civil Remedies Branch of the Office of Counsel to the Inspector General, and Lisa Rae, chief of the Administrative and Civil Remedies Branch, would address how the litigation team would hold individuals accountable, enforce OIG guidance, fill enforcement gaps and amplify OIG work.  

Physicians and clinics beware

Physicians and small clinics that traditionally lack the deep pockets that accompnay a criminal Department of Justice (DOJ) investigation will likely feel the brunt of this new enforcement team, according to Maida.

Over the past year, the OIG has directed its attention toward payment arrangements and potential areas of fraud associated with physician practices. A recent OIG fraud alert discussing physician compensation agreements highlights some of the concerns that the OIG already has with physician practices. In March, an OIG advisory opinion cautioned labs not to enter into agreements with physicians that covered patient fees, an issue that was previously addressed in a July 2014 special fraud alert.

The creation of this new litigation team supports the OIG's ongoing message around individual accountability and forces physicians to rethink how they approach compliance, Maida said.

"If it's not criminal conduct, you end up with this cluster of cases against smaller clinics and physicians that isn't enough for the DOJ, but it's a case that's worth pursuing in the eyes of the Inspector General," he said.

Maida added that physician compliance is "a little behind the curve" compared to larger organizations. This non-compliance is not necessarily born out of intent, but simply because many physician practices don't prioritize compliance. By putting more focus on these issues, the OIG is trying to "change the physician risk calculation," Maida says. As the OIG pursues more cases against physician practices, it sends a message to other providers that find themselves in similar circumstances.

Maida points to a 2012 settlement with Fairmont Diagnostic Center and Open MRI Inc., owned and operated by Jack L. Baker, M.D. After setting with Fairmont and Baker for $650,000, the OIG went after 11 physicians that received kickbacks from Fairmont, collecting $1.4 million over the next several years.

"That's an excellent example of what the OIG is looking to do," he said. "They are looking to do either cases that they generate on their own through data mining, or spinoff cases against other people who are involved in the conduct under the False Claims Act case."

Implications for health systems

Although the OIG's new litigation team will likely have the largest impact on smaller practices, larger hospital systems may also be at risk if compliance monitoring programs are not airtight, Maida said.

As the healthcare industry continues to see a growth in mergers and acquisitions between healthcare systems and physician practices, health systems with purchasing power will require additional due diligence to determine any risk concerns and whether those risks warrant a government disclosure.

Additionally, health systems need to ensure that physicians under their purview are compliant with the Anti-Kickback Statute and False Claims Act requirements. Even seemingly innocuous slips in payment agreements can be misconstrued as a kickback.

"It showcases the importance of a good compliance monitoring program, like paying rent when they are supposed to be paying rent," he says. "These are basic things, but I've been in private practice for six months and I've been surprised at the number of times this occurs." 

Suggested Articles

The HHS OIG is asking for an additional $23.7 million to support fraud oversight that has benefited from an emphasis on data analytics.

A New York surgeon was sentenced to 13 years in prison for fraud and more physician practice news from around the web.

A federal judge has ruled that the U.S. government’s remaining fraud case against UnitedHealth can move forward.