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TCEM: 5 things to know about fraud investigations

May 19, 2017
by BHE Staff
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Over the past two years, there has been a surge in treatment program investigations as part of a broader focus on fraud, waste and abuse. Investigative units from federal and state agencies as well as commercial insurers are devoting more resources to the examination of billing and marketing practices. Penalties can be devastating. Anelia Shaheed, an associate in the law offices of Julie W. Allison and an advisor with the American Addiction Treatment Assn. recently spoke at the Treatment Center Executive & Marketing Retreat, highlighting critical information for every marketer and treatment center leader.


The average sentence for healthcare fraud is five years in prison, and the average rate of successful prosecution is 95%. Marketers can be indicted along with the treatment centers they represent, so be certain to carefully review all contracts and be familiar with the organizations you do business with.


State definitions of patient brokering can be very broad. “There is a lot of concern about deceptive marketing practices in Florida,” Shaheed said. Even paying for cigarettes for a patient would be considered a deceptive practice these days.


Some insurance companies might build their case with: phone calls to patients to verify services delivered; “secret shopper” patients that call the marketer and ask questions; online research; and claims analysis. Even a marketer’s Instagram account can be part of the evaluation. If fraud is detected, the payer could stop all future payments, demand that past reimbursements be returned and send its investigation data to state or federal authorities.


When federal investigators do not have solid evidence early in the process, a marketer or treatment center instead might be charged with banking or mail fraud because the information is easier to obtain. “This now gives them the authority to go into your office and collect your documents, and that’s where they put together the meat of the other cases,” Shaheed said. Fraud and abuse allegations could follow on later.


For treatment centers that accept self-pay and insured clients, the service charges must be the same for both types of client. “There are exceptions to that rule where you can work with a patient who can’t afford, for example $1,000 a day,” Shaheed said. “But there is documentation required and information that must be provided to show the patient’s inability to pay that rate. Otherwise, it can be considered both a false claim and fraud.” Insurers can allege fraud when a self-pay patient is charged, for example, $200 a day, while the insurer is charged the full $1,000.