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Think like a prosecutor: How physicians can address the threat of data mining-based fraud investigations


Federal agencies and law enforcement are using data mining to identify and prosecute providers. Here’s what you need to know.

© enzozo -

Data mining © enzozo -

For decades, digital solutions have played an important role in helping physicians practice more efficiently and effectively. Electronic health records, decision-support platforms, and all manner of practice management, patient scheduling, communication, and billing and reimbursement programs have enabled practitioners to provide higher-quality care and achieve positive patient outcomes.

But these systems do have their downsides. They require significant initial and ongoing training and are only as good as the data on which they are based (much of which is input by physicians and medical staff). In some respects, these platforms also have added to, rather than reduced, practitioner and employee workloads.

While these are important concerns, there is another issue that physicians may not be aware of but that can pose an even greater threat to their livelihoods and their practices: the use of data mining by federal agencies and law enforcement officials to identify and prosecute providers suspected of committing healthcare fraud or malpractice.

This article reviews recent developments and explores ways in which physicians can proactively minimize the likelihood of a law enforcement investigation — and defend themselves should they become the target of such an effort.

Federal regulators and law enforcement ramp up data mining initiatives

Preventing, identifying, and punishing healthcare fraud has long been a priority for federal officials. According to the U.S. Department of Justice (DOJ), the Health Care Fraud Unit of the Fraud Section conducts more trials than any other component of the agency and describes itself as “a leader in using advanced data analytics and algorithmic methods to identify newly emerging health care fraud schemes and to target the most egregious fraudsters.”

Following the COVID-19 public health emergency and the U.S. government’s subsequent injection of approximately $5 trillion in pandemic stimulus money into the national economy — including $482 billion directed toward the healthcare system — much attention has been paid to exactly how, and for what, that money was spent. With the encouragement of the Biden administration, the DOJ and other agency officials have rapidly expanded their investigation and enforcement activities and have cast a very wide, data-based net for potential wrongdoers.

Unfortunately, that wide net is catching more than it should; a number of innocent physicians, clinics, hospitals, and health systems have found themselves swept up in investigations based on incorrect or missing patient, prescription, and procedure data; unintentional billing and reimbursement code mistakes; and other unforced errors. In some cases, insurers are acting as whistleblowers, using their proprietary internal data to identify “suspicious” practitioners and then making reports to law enforcement officials. Another category of concern is investigations launched on the basis of simple misunderstandings about the complex, multifaceted process of delivering effective care to certain patient populations.

For example, the DOJ has used data mining to target physicians whose opioid prescriptions — in terms of total number of patients receiving such prescriptions and the average dosage prescribed — exceed certain benchmarks (benchmarks that evolve over time and often are determined to be flawed, such as the Centers for Disease Control and Prevention’s widely publicized 90 morphine milligram equivalent “limit” that it later disavowed).

As Jacob Foster, acting principal assistant chief of the Health Care Fraud Unit, put it succinctly, “[…] data is not the truth. While it can point us in the right direction, we have to go out and investigate.” Unfortunately, and in practice, law enforcement often does not appear to heed Foster’s advice.

Think like a prosecutor

To help minimize the likelihood of being targeted in a law enforcement investigation or action, you must not only think like a physician — you must also think like a prosecutor.

The following are steps physicians can take to reduce the risk of being flagged by law enforcement and to build a proactive defense should they be notified that they are the target of an investigation:

Become informed regarding peer behaviors and aware of when you are going to deviate. When prescribing medications or ordering treatment, particularly those that are subject to increased scrutiny, such as opioids, durable medical equipment, and lab tests, be sure to know how your peers are handling similar patients and circumstances so that you know whether your treatment plan is going to deviate from those of your peers. When you deviate from your peers, you are at a heightened risk for investigation, particularly when your deviation results in a greater reimbursement request than would have resulted if you had acted more in line with prevailing practice.

When you deviate from your peers, be especially sure to document the legitimate reasons for that deviation. Expect that insurance companies, regulatory agencies, and law enforcement officials will examine such deviations. Note any relevant information that supports why your treatment might differ from that of your peers. Such information might include the unique characteristics of your patient population, the nature of your referral network, the unique training you completed, or the difference in availability/unavailability of certain treatment options.

Document patient outcomes and benefits. Be sure to include in patient records the results of the treatments they receive. If the patient is having a positive response to the treatment that will help justify the continuation of that treatment, but if such information is not included in the chart at the time it is observed, it will appear as an after-the-fact attempt at justification in any investigation.

Practice defensive medicine. If circumstances (e.g., chronic conditions among your patient population) are likely to make you an outlier vis-a-vis your peers, consider referring patients to a specialist.

Consider intentionally downcoding. Physicians who frequently bill for high-cost treatments are more likely to stand out when aggregate data is being analyzed. Consider, for example, whether you are routinely billing for a more-intensive encounter when arguably you could have accurately billed for a less-intensive one. As another example, consider whether you are ordering lab tests that are more comprehensive (and thus more expensive) than might arguably be necessary.

Recognize that you are ultimately responsible for billing staff. Work closely with your employees to ensure that they are correctly coding and billing for services. Routinely meet with them to review any questions or concerns they have and ask about any denials you are receiving from payors. Even if you were unaware that your staff was making systematic errors, you can still be held accountable by law enforcement for incorrect claims for reimbursement.

Proactively engage with Medicare, Medicaid, and insurers regarding billing issues and document the understandings. If payors deny claims and/or advise how you should be billing, reach out to them to ensure there is a mutual understanding of exactly what you are billing for and how they want you to bill for it. Document those interactions as much as possible so you have it for your defense if you are later under investigation.

In an ideal world, physicians would be allowed to focus on what they’ve trained for a decade or more to do: practice medicine. In the current state of affairs, however, they must be increasingly focused on how their practices may be scrutinized by zealous law enforcement hoping to announce the discovery of “fraud, waste, and abuse.” Practitioners and their business managers must therefore take steps to protect themselves, their staff, and their patients from the possibility of unwarranted investigations.

Dan Martin, JD, is a partner on the Healthcare Industry Team at Jones Walker LLP. He represents physicians and other healthcare providers in compliance, white collar criminal defense, employment, and commercial litigation matters. Dan has handled high-stakes cases on behalf of individuals and businesses under investigation or active prosecution by the Department of Justice (DOJ). He is frequently commended for his ability to effectively assess the issues at stake and chart a path forward.

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