The American healthcare system is a unique and complex network of private and public actors. The United States spends more on health care than any other country globally, but various problems within its insurance model also hamper it.
One major issue is what experts refer to as “healthcare fraud,” which includes everything from billing for services that weren’t performed to billing for more expensive services than those that were performed.
According to Ileana Hernandez of Manatt, Phelps & Phillips, “No other industry is as highly regulated as healthcare. Everyone from physicians and hospital administrators to pharmaceutical companies and medical device manufacturers must comply with a complex and ever-changing maze of federal and state regulation.”
Hernandez is a member of the firm’s healthcare litigation practice, where she defends claims involving hospitals and physicians in both federal and state courts. She also represents clients in False Claims Act cases and other whistleblower retaliation matters that allege unfair pay practices, including those under the Stark Law, the Anti-Kickback Statute, and the False Claims Act.
Hernandez says, “As a result of these regulations, the healthcare industry spends more than $30 billion yearly on compliance efforts.”
She adds that it’s essential for providers to understand what is expected of them under the law to avoid engaging in fraud.
“The most important [thing is] to make sure that you’re billing for the right thing and at the right rate,” says Hernandez.
She says providers should keep detailed records of what services were performed and who was treated and maintain policies and procedures that safeguard against fraud. “You can’t just bill for everything under the sun and expect the government to pay for it,” she says.
Hernandez recalls a case in which her client, a prominent New York City hospital, had been accused of billing for services never performed.
“We investigated the problem and found that there was poor record-keeping going on at the facility,” she says. “The employees were entering things into the computer system that didn’t match what was on paper.”
She says her client instituted an automated tracking system to keep better records and worked out a settlement with the government. “You want to make sure you’re able to show not only that you were following policies but also why it’s appropriate for the government to pay for what they’re paying for,” she adds.
Hernandez says because of the existing regulations, providers must be more vigilant than ever about following proper procedures to avoid facing costly litigation or settlements. “This is not something you set and forget about,” she says. “You have to constantly review your compliance efforts because new regulatory issues arise all the time.”
In closing, Hernandez says, “Healthcare fraud is an area that deserves significant attention. While it is impossible to eliminate all healthcare fraud, good policies and procedures will help minimize the risk of engaging in wrongful conduct.”
She also advises providers to seek legal counsel when they have questions about the regulations that impact their practices, noting that many attorneys provide free consultations. “I’d suggest they meet with somebody to talk about what they’re doing and get some insight on whether what they’re doing is appropriate,” she says.