Howdy and welcome to healthcare enforcement trends and government engagement. Look, this is a very important topic today because in our world of healthcare, there are very few things that are more regulated than healthcare. I often joke and say nuclear energy might be the only industry that gets more oversight and regulation than healthcare. But look, it's important. It's important to know what trends are out there from an enforcement perspective and also what to do if the government comes knocking, right? What happens if they show up on your doorstep and how you should react to that. And just things to know that can be helpful because you do have rights and you do have steps that you can take to prepare should that ever happen. And look, this can come in a lot of different forms. It can be state, it could be federal, it can be organizations that are simply just trying to understand sort of your record keeping and bookkeeping, or it can be something even deeper than that. But the good news is all of this helps you prepare, understand your compliance obligations and take the steps you can to minimize risk and continue to focus on providing the best patient care that you can. So my name is John Kelly. I'm a partner at Barnes and Thornburg in Washington, D.C. It's a law firm. We have about 800 lawyers nationwide. I'm chair of the firm's national healthcare practice with more than 105 attorneys that are focused on providing healthcare services to clients all around the country and honestly around the globe. And so it's been a great place to be. And in addition to my time here at Barnes and Thornburg, in my prior life, I was a federal prosecutor at the Department of Justice where I was actually the assistant chief for healthcare fraud nationwide and helped build out the Medicare fraud strike force model that's become a very successful model around the country, started in Miami, then ran the one in Los Angeles and then went to the private sector about 17 years ago. So at this point in my career and for the last 17 years, I represent providers, hospitals, health systems, labs, pharma, med device, you sort of name it, and healthcare, I represent them when they get into real trouble, when there's issues with the government, when they're dealing with compliance issues, investigation issues, false claims act litigation, et cetera. So why don't we get into it? We've got a lot to cover. We've got just about an hour. And so let's get going. So why is healthcare and healthcare spending and healthcare fraud and abuse such an important topic today? Well, that's because of the money flowing through the system. We have an annual growth rate of 5.4 percent. We expect healthcare spending to reach over $7.2 trillion with a capital T by 2031. And if you just consider what it would look like if about 10 percent of that spending got lost to healthcare fraud and abuse, that's $720 billion. So you can imagine with that much money at risk and at stake, and this is just assuming 10 percent, it could be more. There's a lot of incentive for state and federal governments to pay great attention to where that money is being spent, the type of quality of services being provided, are people providing the services that they're billing for, are they medically necessary, all those kind of issues that go into what we talk about when it comes to healthcare fraud. And we're going to touch on compliance later. But compliance really becomes that first line of defense. And there's no more excuses today. If you are in healthcare, you need to have a compliance-focused program. And it's an expectation from the government. There's no one-size-fits-all. But you've got to have it because it is going to help you in terms of identifying risk areas and minimizing that risk. So what's happened over the last few years? As we look at the healthcare enforcement environment, it really has continued to evolve. And I refer to it as a perfect storm. You can see you have law enforcement making healthcare a priority. It didn't used to be healthcare fraud a priority. Now it is, both civil and criminal healthcare fraud. We also have administrative agencies. We'll talk about that. You've got support from the Hill. What I mean by that is you're seeing changes in terms of statutory changes, regulatory changes, more resources. We're seeing laws change that are strengthening the government's ability to pursue healthcare fraud, giving them more tools in their toolbox, investigative tools, speaking of tools. You've got data mining. You've got more resources than they've ever had before. In fact, many years ago, when we started the Medicare Fraud Strike Force, you couldn't get real-time data. You couldn't get data within weeks after we were requesting it. Now they're looking at data that's almost real-time. You have folks that are mining that data all the time at the Department of Justice, and they're looking for anomalies. For example, is there some situation where maybe you've got 3% of the patient population that would need orthotic arm braces in, you know, pick a part of the country, Houston, Texas. But meanwhile, 20% of all orthotic arm braces are being ordered there. Well, that's a problem, right? So they identify these anomalies, then they start to investigate. We also have at the top right there heat and parallel investigations. What I'm talking about there is the continued cooperation between government agencies externally and also the DOJ internally, where you've got civil prosecutors talking to criminal prosecutors. They're working with HHS-OIG that oversees the administrative function. All of that comes together. And so this day and age, you've got to think about all three pieces. And finally, whistleblowers. We're going to talk a lot about the False Claims Act today, and that False Claims Act has a whistleblower component where folks can bring a False Claims Act claim against, let's say, for example, a hospital. And if the government recovers, they get a piece of that award, and this could be millions of dollars. So a lot of financial incentive for folks to be whistleblowers, more so than ever. Again, a lot going on in healthcare. And we talked about the different enforcement options a little bit there before. There's always three pieces, civil, criminal, and administrative. And this is where you do see folks get into trouble. There's one thing I would urge you is if you ever have an issue, whatever it may be, whether it's an audit, whether it's an investigation, whatever may come your way, make sure you're hiring outside counsel that understands healthcare. Too many times I've seen folks that they go, they hire their buddy down the street that they play golf with who's a real estate lawyer, work out some type of a resolution, and no one ever thinks about the administrative piece, and now they're getting excluded from Medicare. So very important to understand all three pieces, and important to understand the nuances in healthcare. Very hard to dabble in this space. Okay, let's look at the False Claims Act. So for those of you not familiar with it, the False Claims Act basically says that you cannot knowingly submit or cause the submission of false claims to the government. And again, there's a provision here that allows everyday U.S. citizens to come forward and bring a case. And the way it works is that case would be brought forward by somebody. They file the claim or the complaint that lays out the allegations of why it's a False Claims Act violation. It's done under seal. The government has to review it. So that gets filed, DOJ has to review that particular case, they use their own resources, they investigate it, and at some point in time the government has to decide are we going forward taking this case over and pursuing it, or are we going to decline to get involved in it and let the whistleblower go on their own if they choose to. Big recoveries here, the government decides to go forward, or if the whistleblower goes forward without the government and there's a recovery, usually the whistleblower's getting anywhere between 15 to 30 percent. So you can imagine if you have a $100 million False Claims Act settlement, that's a ton of money. And this is why we continue to see a steady stream of these cases. Penalties for False Claims Act cases. Total damages, meaning three times whatever the loss to the, let's say it's the Medicare Trust Fund, three times that loss, plus a per claim penalty of almost $14,000 to $28,000, just a touch under. So you can imagine how quickly that can add up. So a lot of pressure in these cases, a lot of incentive for folks to resolve them prior to trial, because at trial it would be devastating to have that kind of a hit for the vast majority of defendants out there. And again, health care makes up the vast majority of False Claims Act cases in the country. And we're going to get into some of these numbers. Who are the key players in health care enforcement? Medicare and Medicaid. So those are the key programs. You have DOJ, HHS-OIG, state Medicare fraud control units, the state AGs have figured out that there's a lot of ability to do good work and to recover funds for the state Medicaid programs as well as CMS. And then you have all kinds of different contractors that are involved, too, that are providing additional oversight. So when we look at the numbers under the False Claims Act, last year in fiscal year 2024, you had 979 brand new cases filed. We call them key TAM lawsuits or whistleblower lawsuits. The year prior to that, there were 712, but you can see that there's a pretty consistent range between that 650 to around a little over 700 for a number of years. We see a dip in 2021 from 2020 to 2021. We can all remember what was happening then. It was the pandemic. Obviously, there wasn't going to be a lot of activity at that point in time. So we did see a dip. And then, you know, the world opened up again and you start to see the steady increase. So this just has always been the government's most effective tool in the fight against fraud, waste, and abuse. And it's going to continue to be because it relies and it encourages folks that are inside the walls of an organization to come forward and present information, and then they're off to the races. So again, I expect that you'll continue to see these very high numbers over the next few years, even though we don't know what these next few years are going to look like with all the changes of the agencies. But this has been an area where there just has continued to be a lot of activity over the years, and it survived over the years. So I expect it will remain the same. In terms of let's talk about the dollar values involved in the False Claims Act cases last year. So again, fiscal year 2024, we're looking at recoveries of 2.92 billion dollars. That's total False Claims Act recoveries. 1.67 billion of that was health care related. I'll tell you that normally it's a higher percentage. This year was, I think, the first year I can remember over the last decade plus where you saw a percentage being at that low level, though it's still very high. It was a little lower than the year before. But again, health care has always been the top area or the top industry that has to deal with health care or I'm sorry, False Claims Act cases. 558 settlements and judgments, 370, again, health care related key time suits were brand new and 189 million in health care related recoveries. And so again, you know, that's the 189 million are the recoveries that went to the relater. So again, 1.67 billion is recovered by the government. They carve out a percentage of that and they give that to the relater as an award. So 100, almost 190 million dollars was paid out to relaters. Again, that's a heck of an incentive. So as we look at the chart to the chart shows a pretty steady stream of recoveries. Again, you have this sort of, you know, two billion to three billion number that's hit over the years. The big jump in 2021, right, because of the coming out of the pandemic, then it sort of settles back into the normal range. So again, if I'm a betting person, I think we're going to see similar numbers next year. So very effective tool and real dollars when we think about enforcement efforts. What are some of the top alleged violations when it comes to the False Claims Act? Upcoding, billing for services that were rendered, of course, that's going to always that's always going to get someone's attention, right? If you're billing for services that weren't medically necessary, even though they were provided in other area. But kickbacks has typically been king when it comes to the False Claims Act case. As we look sort of towards the bottom, kickbacks is one of the most prominent areas that is the foundation to the False Claims Act case. And it always has been and will continue to be. It just tends to be an area where folks find themselves in terms of the allegations being in those cases. It tends to be one of the top ones. Starklaw, by the way, also we continue to see all the time. Starklaw involves a referral and financial relationships and referral of items and services. Still to this day, even though there are some exceptions card out, it can be an area of as a foundational area for a False Claims Act case. So just good things to keep in mind. Let's drill down now into some of the recoveries because these recoveries are pretty noteworthy. And I think there's some information we can pull out of here that's going to be helpful for those of you in this health care area. As we look at these, so starting at the top, we have COVID-19 related enforcement continues to pick up. It started with the real low hanging fruit type cases and now continues to sort of get into the ones that are a little more sophisticated and complex. We saw three recoveries last and this is actually 2023. I'm going to show you 2023 and 2024 numbers. And this shows you a total recovery of over 12 million and 4.2 million average recovery. And this is where I think it gets very interesting. Hospitals and health systems, 20 recoveries, again, getting hit by a lot of False Claims Act cases, 654 million dollars, more than 654 million in total recoveries just when it comes to hospitals and health systems in 2023. And then we have an average recovery of over 32 million dollars. Those are big numbers. And one corporate integrity agreement, that's that administrative piece that HHS-OIG can come in on and require that you do very specific compliance program related steps that you have to satisfy for five years, typically. Pharmaceutical companies, 17 settlements, 346 million, 20 million per average recovery. Med device, 448 million. Now, this is the number that really surprised me. Fifty three False Claims Act recoveries against individual providers and practice groups with an average recovery of 4.4 million dollars, three corporate integrity agreements, five exclusions. When you think about 4.4 million dollars on average and what that would do to a small practice, it would cripple it financially. So this, again, is a reminder of how important compliance is when it comes to health care, how important you need to view it in terms of being able to get out in front of issues, identify them through a compliance program or through your own internal controls. And if there is a problem, you correct it immediately, because if you do have an issue and it continues on, the numbers just grow and grow and grow and the exposure grows. And that's what an effective compliance program will do for you. Right. It'll find it ideally in advance. It'll find it. It'll stop it. And you start to stop the bleeding. No pun intended. Laboratory services, again, 445 million dollars. So these are big, big settlement numbers. Data privacy, where we started to see more activity there, 13 million. Managed care is an area we're going to talk about. Managed care continues to be a growth area. Part of that is literally because of the increasing number of beneficiaries that are going into managed care and Medicare Advantage. Two hundred and thirty three million dollars across four settlements. Huge numbers. Fifty eight million dollar average settlement number. So, again, when you think about how Medicare Advantage or managed care can work and the impact it can have on pricing, if you're doing something wrong, billing, coding, whatever it may be, your practices that are driving up the cost in an inappropriate way, it can have a significant impact on any organization financially. Let's take a look at 2024. We have 27 recoveries. Let's see if this compares to 20 in 2023. I'm talking about hospitals and health systems. For three hundred and twenty three million, 11, almost 12 million dollars average recovery. Two corporate integrity agreements. Very active in 2024 when it comes to hospitals and health systems. And then let's go down a couple of lines and look back at the individual providers and practice groups. Again, more than 50 different settlements or recoveries. And this time it's just a touch under three million, but still significant when you think about the size of what types of practice groups or the number of physicians and the revenue that these particular smaller practice groups may have. So it can be a very significant hit if you, again, are not doing things the right way, you're not catching it. And then you'll see sort of Medicare Advantage, another very big year, two settlements, average fifty six million. So you continue to see these kind of numbers. And again, if I expect you'll continue to see it in 2025 as well. Office of Inspector General. So they handle HHS OIG handles the administrative piece of these enforcement efforts. And in 2024, HHS OIG excluded more than thirty two hundred individuals and entities from Medicare, Medicaid and other federal health care programs. Twenty twenty three. It was twenty one hundred. So a huge jump in twenty twenty four. You do see over the years this sort of two to three thousand exclusions over over many years. That's kind of where it's in that ballpark. So they're within that general range. But again, much more active than I would have anticipated. Eight hundred and seventy one. Just looking at some of the breakdown in twenty twenty three, eight hundred and seventy one exclusions were based on criminal convictions. Two hundred and three were crimes related to patient abuse or neglect. So you have a lot of different basis for these kind of exclusions and it's getting more active. And in fact, HHS OIG now has folks that affirmatively litigate on their behalf. They didn't used to have that type of a component internally and now they do. So, again, times continue to change and the agencies that are providing oversight continue to develop more skills and become more involved in more areas. All right, let's take a look now that we've talked through the background and the trends and what we're seeing just from the data. I can be a data person. I like to see those trends and sort of read what the tea leaves are as we look forward. But let's talk about some of the case law, because this does have an impact. OK, in twenty twenty two, the US Supreme Court issued a couple of different decisions that were that had a big, big impact on the False Claims Act and the world that I live in every day, super value and safe way cases. And essentially what this said was, look, the days when you could argue as a defense attorney, well, it's reasonable for the reasonable person would have done that. It's understandable. Anyone would have done that. Those days are over with the Supreme Court said we don't care about an objective standard. What matters is subjective. What was the defendant's subjective belief at the time that the action of the conduct took place? So you have to look specifically at what's happening for that particular subject or that particular defendant. And then Polanski, there had been a big split going on in the courts about whether or not the DOJ could step in at any time to dismiss a False Claims Act litigation. Because remember, the DOJ is going to look at every case, they're going to review it, and then they're going to make a decision. Well, it's under seal hair. Are we going to get involved in this case or not? They call it be intervening in the case. And most cases DOJ will not intervene. There's a much higher percentage that they choose not to intervene than they do, but they can always come back in. And this just confirmed that they could come back in and they have the authority to dismiss a case at any point as long as they intervene back in and dismiss it. So it was really just confirming that the authority and power that the DOJ has to dismiss a case, it's frivolous, it's going to be a waste of resources, et cetera. It doesn't happen a lot, but it can happen. It does happen, but very rarely. So it is something that as a defense attorney, right, as a prosecutor, they're looking at cases very carefully and they want to make sure that the case is moving forward unless it has absolutely no factual or legal basis. On our end as defense attorneys, right, we're making these same arguments. We're trying to explain to the government, you don't have what you need here to move forward. And by the way, you have the ability to dismiss this case and you should in this instance. And here's why. And you lay your arguments out. So, very helpful cases on the defense side. And then the Chevron Doctrine had to do with administrative agencies providing guidance. So, for a very long time, agencies, and they continue to do so, will provide guidance. So, they'll say, look, even though the law is ambiguous in this particular area, we're telling you this is what it means. And essentially what happened was that, look, that ability to be deferential to that guidance as a court is done. The courts are not going to be deferential to that. They're going to look at the statutory language. They're going to take a look at the rules and understand, hey, look, here's what the statutory language is. Here's what we believe the intent was. And in future litigation, trying to figure out if it's, if it is ambiguous, and there's no delegation of authority, what does that mean? And we're not going to just use this guidance as like it's legal guidance, like it's lawful, like it's no different than a statute, because it's not. It's just guidance that gets put out by an agency that hasn't gone through the same type of administrative due diligence that a statutory rule would, or even a regulation. So, again, something that's, a lot of activity over the last couple of years in the very nuances of the False Claims Act, and part of that's because it has become such a powerful tool, and so it's generating more litigation and more questions around it. And here's a very interesting issue that's popped up back in September of 2024, and this is a big deal in the False Claims Act world. A federal court down in Florida said that the False Claims Act is not constitutional. It reasoned that, well, relators or whistleblowers that come in are actually exercising executive power and government authority when they litigate a claim on behalf of the government. If DOJ says we're not going to intervene and they go forward, or whether they intervene or not, I should say, they're litigating a case on behalf of the government, and the court said, we don't believe that this is constitutional. You can imagine the Department of Justice said, no, no, no, it's constitutional, and we're going to argue why it's constitutional. So this litigation continues. On January 6th of this year, the Department of Justice, or the United States, filed a brief in the 11th Circuit arguing why it's constitutional and why the key TAMs should continue forward, or the False Claims Act should continue forward without any interruption, and we expect that there will continue to be litigation on this. We're waiting. Obviously, it could take a while to get a decision here, but this has a big, big impact on our world, should the court agree that the False Claims Act is, in fact, unconstitutional. So time will tell, but again, I'm sort of anticipating here that the False Claims Act investigations activity will continue and continue to be very active. So other sort of key enforcement areas that we need to think about. You know, as we talk about the government and the different tools that they have in their focus on fighting health care fraud and abuse, it's kind of remembering, too, that again, they keep getting more sophisticated, right? The agents, their technology, the prosecutors, and they're using real-time data that we talked about to detect potential fraud. They're also spending more time looking at compliance programs or looking at companies that come in and disclose with more favor. They're looking at companies that cooperate with more favor. They're continuing to build in guidance and different types of programs and systems and policies that encourage companies, individuals, and companies to come in and disclose when there has been, in fact, some type of an issue that creates an overpayment, right? That's sort of the key in the world of health care. Did you get an overpayment? Did you file a claim and get paid for something you shouldn't have been paid for? And if it does trigger an overpayment, why? And then going in and sort of working through that with the government. If you have an overpayment, there's what's called the 60-day rule, and there's some nuances to it. But at a very high level, it says, well, if you receive an overpayment and you have it for over 60 days and you haven't addressed it, then it could be the basis for a false claims act case. And again, there's nuances to it and when the 60 days is triggered. But what you really need to know is, if you are receiving payment for any types of claims, services, items, et cetera, and it shouldn't have been paid, then you've got to return that overpayment or else it can trigger a tremendous amount of risk for the organization. And potentially you individually too. COVID-19. So again, as we think about some of the trends in enforcement, I mentioned before COVID-19, this has become a hot area as you can imagine, right? There were a lot of those simple cases coming out of the pandemic. Someone said, hey, I need PPP money. It's related to COVID-19. And they went out and bought a Ferrari, right? That's easy. We see those cases, the government's been dealing with those cases. They've charged more than 3,500 defendants just the last couple of years with different types of COVID-19 related fraud and seized more than $1.4 billion. So very active. April of 2023, they had the largest coordinated effort ever. And that coordination is very important to remember because the government has gotten much better at coordinating across different agencies, federal agencies, state agencies, merging resources, merging information, and we're using it all together to help just be more effective in their investigations. And again, that's taken many years to develop. Wasn't always that way. And so here we have a $490 million in alleged fraud and 20 defendants were charged criminally. Then in August, it was now the next largest ever of $836 million and 371 defendants were charged criminal. Think about what a huge number that is. And look, the government loves these splashes. They make a big splash. These cases are all over the news. It creates a deterrent effect as well as just a tremendous amount of recoveries and forfeitures and seizures by the government. So very active in COVID-19. Data privacy and cybersecurity. If you're in healthcare, there's been, I don't believe any industry that's been targeted more than healthcare when it comes to cyber attacks. Because the information that we have in our electronic databases, our health records, it's very valuable. It has a tremendous street value and value. And I'll tell you, I've actually worked on some of these types of matters. I've seen what the dark web looks like working with computer forensic experts and folks that deal with these kind of issues on cybersecurity. And if you have never seen it, what I will tell you is it is like Amazon for criminals in a way, right? It's literally you go on and you can buy anything and you'll see ads for PHI, ads for stolen credit cards. I mean, you just click and you purchase. It's a whole different world. And that data has a tremendous value, right? And so that's why we continue to see hospitals, health systems, people that are healthcare professionals under attack when it comes to cyber attacks. A lot of large breaches over the last few years. 2023, they had 13 different resolutions involving HIPAA violations. FTC is seeing more enforcement activity and getting much tougher and stricter in terms of its rules. 12 million in fines for misuse of healthcare data. $144 million in total payments since its inception that has been settled or imposed through CMPs by HHS OCR. So 152 cases, $144 million. This just continues to happen more and more frequently. And as good as our cybersecurity efforts are, sometimes the hackers are better. So what I would encourage you is, again, as healthcare professionals, and if you are especially in a smaller practice, you want to make sure that you are investing in those cybersecurity type experts to help you. Health systems, of course, right? Health systems are going to have chief information technology officers. They should have the type of resources and folks that they need to ensure that that data is protected. And sometimes, look, it's just human error, right? Someone takes a laptop out when they should know, then they lose it. Or they click on some type of email they should have never clicked on. But those are the types of trainings that help and education that help protect you. And you hope people identify that before they click on it. So again, an area of real focus and importance. Telemedicine. If there's one thing we learned during the pandemic, it's that telemedicine is an incredibly valuable tool. It helps us, right? I mean, we've learned that we can use it, that we can see patients, we can do a lot of great things through it. Unfortunately, it's also become an area of potential fraud and being used as a tool for fraud. And so there's been a number of massive takedowns, a lot of guidance being issued. Here's what I would say. If you're a physician, regardless of your specialty, and you're right, everyone on here should be a DO, you're right, you're all osteopathic physicians, what you should realize, though, if you're getting contacted by people outside of your regular sort of course of business to moonlight in the telemedicine world, regardless of the area, genetic testing, DME, maybe it's addiction, right, whatever it may be, mental health, you've really got to be very careful. There's a lot of scams out there. There's a lot of fraud being committed. And these folks are good at it. And they'll tell you no, no, no, don't worry, Dr. Smith, this is totally fine. We've run this by our lawyers. Yes, you can do this. But here's an opinion from one of our lawyers. And they will sell this as if it's completely on the up and up. And I'll give you a great example of this that we saw where a tremendous hundreds and hundreds of doctors across the country got pulled into involved DME and genetic testing. On the DME side, physicians would get engaged, they get paid $25, essentially a pop, $25 to listen to or record. So the company would have sales reps who would contact Medicare beneficiaries, talk to them about some of their aches and pains and say, you know, you can get a free ankle brace, a free knee brace, a free back brace, whatever it may be, Medicare will pay for it. Don't you want one of those? And the person would say they'd want it. And then ultimately, a physician would listen to it this recording, no face to face contact with the patient, no measurements, no sort of assessing them in person, just a recording, and would either order or not order the DME device. As you can imagine, right, that that doesn't seem quite right. But they were being told this was valid. It was all legitimate. It was an okay way to do it. And ultimately come to find out it's of course it's not. There's a massive takedown. And for the physicians that did not get arrested or charged criminally, they did get excluded, which you all know is a death is a death blow in your profession, right to be excluded from Medicare and Medicaid, being able to deal with government payers. So it created a lot of issue. And so you know, when you think about practicing medicine, that's not the right way to use telemedicine. And that's not the right way to practice medicine. And the same thing with genetic testing, another area that's been a hot area now that look, that's not to say there aren't legitimate telemedicine companies, of course, there are. My point in this story is to encourage you that if you are approaching you want to moonlight, or you're going to use this in a different way than you're used to. Just be incredibly careful, go to your legal and compliance officers, go to go to your attorneys and deal with healthcare, front this with them in advance, because you don't want to get partway down the road in this and realize it was wrong. And so I would really encourage you to do that. Because look, if it's too good to be true, it seems good to be true, it probably is. And when I tell you, hundreds and hundreds of physicians get caught up in this stuff every year, with very good intentions. And they make a mistake and for a very small amount of money, ultimately, they put their entire careers in jeopardy. And I'm not exaggerating when I say that. So again, encourage you to pay a lot of attention to that. I mentioned how DOJ it has these big sort of splashes or these takedowns. This is a great example in 2024 $2.75 billion in alleged fraud 193 defendants are arrested 1.1 billion related telemedicine 900 million related to amniotic wound graphs, another area getting a lot of attention from enforcement perspective, wound graphs, the number of how many times are you applying that? How expensive are these wound graphs? How many times are you applying it? Is it medically necessary or not? Are you billing for services actually, that have been provided laboratory for labs constantly under scrutiny, right, especially if you're in the pain med world. And in particular, we're spending, you know, urine testing all of those. And again, I want to be very clear that there are great, great reasons and uses for all these different kinds of products and services. But you got to make sure that it's being done the right way. Addiction treatment 146 million. So I'm sure in 2025, we'll probably see another type of these takedowns. It's something that happens every year. It's coordinated across multiple, multiple states, all kinds of agencies from enforcement regulatory agencies are involved. And they make they make a lot of news in terms of it and have a deterrent effect. Private equity. Another area to where private equity, what you're seeing happening in the private equity side is, it's gotten a lot of bad press over the years. Private equity can do some great things in healthcare, right? It can bring innovation, it can bring an infusion of capital, it can bring a business mindset sometimes to the practice of medicine that that healthcare practitioners might need, depending on how they practice and where they practice. So there's a very good side to it. The bad side is there's also this sort of PR issue of well, it's profits over patients, quality of care drops. You know, you're worried more about revenue than outcomes, those kind of criticisms that occur. So what that's created is state and federal agencies paying a lot more attention to private equities role in healthcare. And a lot of states are creating all these transparency rules where you're going to do a transaction in a particular state that has these new transparency rules. And they want to know who the owners are, not just on the sort of on the surface, they want to know behind that who the owners are. And you have to go through a process. And if you don't do that process, you're going to face all kinds of issues with your transaction. And the whole point of that is to focus on the days when private equity stood in the back and there was a transaction, it was a portfolio company, but you didn't really know who owned it. And again, those days are over in most states now and more and more states continue to have those transparency rules. And of course, the federal government's paying attention as well. So we have seen an uptick in regulatory oversight of deals involving private equity. In the healthcare space, we've also seen an uptick in some of the false claims that cases involving private equity in the healthcare space. So again, just something to keep in mind if you are working with private equity, or you're potentially getting into a transaction with private equity, it can be a great thing. And it could be something that your business really needs. But I offer this to you more because you should know that there is a lot of a lot more oversight and a lot more scrutiny of these kinds of transactions than there's ever been before. And so having folks that really understand that world, having people handling your deals and understand healthcare, understand the transparency requirements, makes it go a lot smoother. Okay, another area that's also getting some scrutiny, remote patient monitoring. In September of 2024, HHS-OIG issued a report about this exact service. Again, this service can provide a tremendous amount of value, right? I mean, if you think about a patient that you send home, and let's just say hypothetically, a patient might have a heart condition, and they put on two pounds overnight, or something happens, right, that it sort of triggers the remote patient monitor to pay attention to it. They're recording their data, that data is going in. It can be a pretty significant data point for a physician to understand and recognize. So again, it can be a great tool. When it's misused, it's a problem, just like we talked about telemedicine. And part of the reason you're seeing a lot more scrutiny around remote patient monitoring is just the pure number of Medicare patients who've signed up for it in the last few years, as well as the dollars flowing through the system for that service. And when you look at those numbers, they're pretty staggering. In 2019, you had 55,000 Medicare patients involved in remote patient monitoring. And just a few years later, three years later, 570,000. Medicare costs $15 million in 2019, $311 million in 2022. That is going to get people's attention. In terms of Medicare, in terms of contractors, it's going to get, and HHS-OIG gets your attention. And if HHS-OIG issues a report like this, I can promise you there's a reason for it. You may recall a few years ago, they issued a similar report involving speaker programs where they questioned speaker programs, the validity of that, that relationship between pharmaceutical manufacturers, medical device manufacturers, and physicians. And look, there's obviously an important component to that. Medical device, like you need that physician input, right? They help design, they help create, they help with the manufacturing in terms of creating innovative tools. Same on the pharma side. We've got to have money and we've got to have the ability to create new therapies, right, to continue to help patient populations in need. The problem becomes when those relationships become very murky and physicians are being paid for things that they're not really doing. If you've got, if you get a consulting agreement and you're not really consulting and you're getting paid and it seems to be tied to something other than your consulting work, you've got a problem. All right, and then we have to remember when we think about HHS-OIG issuing a report like this, this is red flags everywhere. This is telling you we see a problem, we're seeing it a lot, we have concerns, and we're letting you know we're paying attention to this area. And one of the issues with remote patient monitoring is sort of the, there's a couple of steps that have to be, take place, right? The patient has to get the actual remote patient monitoring equipment. They then have to be trained on it. The data has to then be submitted. Someone has to be reading the data. So there's all these pieces to it that have to be followed or it's not being used correctly. So something to keep in mind if you're involved in your patients that are being put on remote patient monitoring. It can be a great tool, got to be done right. And so again, I want to talk some more, I'm going to have some great examples for you in particular on one of these cases that was a client of mine and, you know, shows a good example of what can happen when you get too close to the pharmaceutical or the medical device manufacturing reps. Open Payments Sunshine Act. So this was born out of wanting to understand, the federal government wanting to understand the specific issue around this relationship between physicians and manufacturers. How much money is out there being paid? What is it being paid for? So in year 2023, when we look at the open payments program, this is all the data that has to be submitted. $12.75 billion was actually provided to physicians through, you know, through these different programs and different types of payments to physicians. So pharmaceutical manufacturers, medical device companies, biotech, paying this type of money to physicians for all kinds of reasons. And look, the vast majority of it legitimate. $3.29 billion in general payments. $8.12 billion in research payments. $1.34 billion in ownership interest. So 15.64 million records were submitted in that open in 2023, detailing different things of value, different payments that are being made to physicians from the pharmaceutical and medical device manufacturers and other folks in this industry. So again, really significant dollars that are being shared through this industry. So again, you can imagine why this is getting the attention of the government. Both federal and state oversight agencies are saying, wait a minute, if you're getting paid this much money, it can't impact or influence your decision making. The quality of care has to remain high, the decision-making has to be completely objective, right? You can't let the money influence you, and that's where folks get in trouble. And what you have to remember too, is that the anti-kickback statute is a two-way street. So what I mean by that is, if you offer or give something of value, I'll use my example of physician. You give a physician something of value and that physician takes that and it influences them to do something they shouldn't be doing and it's influencing them to refer a patient for an item or service or to provide an item or service that they shouldn't be, that's one side of the equation, right, that's a violation of the kickback statute. The other side is if you're a physician and you ask for it or you get it, you receive it and take it, that's the other side of the street. So both the physician asking or getting and the person who's offering or giving can both be prosecuted under the anti-kickback statute criminally. It can also be a foundational basis for a False Claims Act litigation, right? So again, this data is combed and looked at all the time by government, whistleblowers and also by compliance programs. They're taking a look at this and paying a lot of attention to it. Medicare Advantage, I mentioned earlier that we were gonna talk a little bit about Medicare Advantage and managed care because it's become so popular. Look, the healthcare world is changing and you're probably feeling it in your own practices where we're moving away from a fee-for-service structure into Medicare Advantage risk adjustment. That patient population has doubled in the last decade. So 32.8 million beneficiaries or 54% of the entire population has been enrolled in Medicare Advantage in 2024, 54%. So a significant number, $462 billion of total spending and that's only projected to continue to grow. So this is why when we talk about enforcement, there's a lot of attention being paid to Medicare Advantage and how it's being used, the funds that are flowing through it, the data that's going through it and making sure that it's all accurate and accounted for. And this is sort of the perfect ski slope, right? It shows you the enrollment trends in Medicare Advantage and Medicare beneficiaries continuing to grow, grow, grow every year. We expect that to continue. And when we talk about what is risk adjustment and how is it used? Okay, so Medicare Advantage risk adjustment, again, fee-for-service, right? You go to the doctor, doctor sees you as a patient, they diagnose you, they enter information into the chart, file a claim and get paid. Very different Medicare Advantage. Medicare Advantage is you've got at the very top of it, right, you've got the government, CMS, you've got them entering into a contractual relationship with a commercial payer to service or provide this particular Medicare Advantage plan, the plan then will typically have relationships, either there'll be a managed services order, MSO, underneath it, or if not, just straight relation, contractual relations with the physicians. And that relationship is, well, if we have Medicare beneficiaries that are part of our Medicare Advantage plan, let's just, for numbers, let's say we have 1,000. We have 1,000 Medicare beneficiaries that are Medicare Advantage plan members. And I find a physician in South Florida, hey, will you please provide services and the care for our patients? You enter into that relationship, contractual relationship. And that physician is getting a per member, per month payment. So when you think about the structure, you've got money flowing from the government down through the plan, potentially, right? If there's an MSO, all the way down to the provider and the data comes up. So the data runs up, provider from the patient encounter, right? Comes up, goes through the MSO, up through the plan to the government. And so money flowing down, data going up, and it's all part of one very important connected system. And the way it works is every patient is basically assigned a risk adjusting number or ratio. And it's based on how sick or healthy your patient population is. So let's go back to the example of 1,000 patients. You have 1,000 patients. Those patients are extremely healthy. When you compare all of their data, all of their healthcare information, and you compare it to a patient population that's similarly situated, then their risk adjusting payment is gonna be lower. Their per month, per member payment. Let's say it's supposed to be $100 for every single member per month. It might drop to 98. Let's say that patient population is incredibly sick when it's compared to its peers. Then the number goes up. So the sicker your patient population, the higher the per member per month payment means you make more money or you get more money for the care. The healthier your patient population, it drops and you get less money for the care. So as you can imagine, people figured out at some point in time, hey, one way we can sort of work with this system and make more money is if we artificially inflate the sickness of our patient population. And that's where you see folks getting into trouble. So again, what you like about this system is in theory, right, it creates an even playing field, a level playing field across all of the patient populations. It's collecting data and using this data on a very consistent basis to adjust and to move and to shift in terms of what the per member per month payment is. And it's aligning the payments with the type of care that might be needed. So it can be very complicated, but the way the process works, I mentioned before, right, as the patient goes to the doctor, starts with that encounter. Then you see here at the top, provider submits the information to the Medicare Advantage company, that company then submits the service record to CMS. CMS crunches its data, it does its, you know, statistical voodoo magic. It ultimately comes out with a risk adjustment payment. And so, again, that flow of data has to be accurate, right, coming up from the provider up through the system to the government. And the money then coming back down flows back the other way. And what's important to remember is that the diagnosis, the codes that are being provided, those diagnosis codes are what trigger the risk adjustment movement. Not every code is gonna risk adjust, but if it's linked to an HCC, it will risk adjust. And the, again, the codes that tend to risk adjust the highest are gonna be codes with the greatest complications, right? So imagine someone with diabetes, that's gonna be a code that might risk adjust, but then if someone has diabetes with complications, it's more severe, it's gonna be a higher risk adjustment code, it's gonna drive up the per member per month payment ultimately, because your patient population is being artificially inflated if it's not valid. So it's important to remember in the Medicare Advantage space, if you are seeing Medicare Advantage patients, it's just the importance to be accurate. And it's important that you be accurate with your coding, accurate, accurate, accurate, can't say it enough, and that you are documenting in a very thorough way in your records, because it's not just good enough to say someone has diabetes with complications or diabetic retinopathy, let's use that as an example. Patient Smith has diabetic retinopathy, but when you then compare that to the record, there has to be the specialist reporting there, there has to be the right medications being prescribed, there has to be all this backup data supporting that. So you have to have the right support in the record. So two pieces, accurate diagnosis coding, support in the record. And this is a great example of what can happen when you have codes that are different. So let's start on the far right. You have a 90 to 94-year-old man, incredibly healthy. When you look down, right, he has none of these chronic conditions. His adjusted risk score towards the bottom in bold, 0.741, so instead of being a baseline of one, his adjusted risk score is 0.741 because he's so healthy in relation to his peers. The base premium right below that is $800. Well, you multiply that 800 times 0.741, the monthly payment for the care of this patient is now $593 or $7,100 a year. Now let's go to the far left. If you look at a very sick 90 to 94-year-old gentleman, diabetes with chronic complications, dementia, congestive heart failure, right? Some really significant chronic illnesses here. Adjusted risk score is now 2.25 down there towards the bottom in bold, times $800 per month. It's now $1,800 that you are receiving to provide the care for this particular patient, right? When I say you, I mean the plan and then the plan funnels funds down through your contractual relationship. So $21,000 as opposed to $7,100 for the care of that patient annually. So you can see what can happen if people get really aggressive with how they're coding. So it's something just to pay attention to and keep in mind. And settlements can range $172 million by Cigna Group, 60 million by Oak Street Health. So this all starts to become really big numbers. And this is an area where there's at least 28 unsealed false claims that case is pending and the government's been very active and whistleblowers have been active and they continue to be and will be. What I wanna do in the interest of time is talk also about some of the policy updates. DOJ has issued a number of updates in the last two years. All around, again, trying to incentivize folks to come in, trying to incentivize companies to focus on compliance. And so, for example, one of the policy updates in the criminal division talks about clawbacks. And so what had happened is they got kind of sick and tired of executives in a company who were helping to facilitate problematic conduct or actions and then not getting hit financially for it. So now they're wanting to see baked into the compliance program, some compensation and bonus restrictions that actually allow them to pull money back. And if they're able to pull money back when there's a wrongdoer, the government will actually increase some of the types of credits they might get from the penalty or fine. I'm talking about this at a very high level, but that's the gist of it is, look, a CEO shouldn't get a $20 million bonus at some big pharma company after they've caused a real significant issue to develop in a false claims that case, right? They didn't do the right things, they didn't have the right culture. Those days are over, you need to claw that money back. We also have the criminal divisions, corporate enforcement policy at DOJ. Again, incentives to voluntarily cooperate, incentives to disclose and to come in the door. And look, you can disclose and cooperate, you cannot disclose but then cooperate if it's too late and the government finds out. But the bottom line is they're trying to memorialize and make it more formal. The understanding of the benefits you get as an organization or individual when you do disclose and you do cooperate. And it's been an area of quite frankly, a lot of some criticism over the years, right? Because you didn't always know what the benefit was other than it. It certainly helped to get out in front of an issue and be able to help try to work the narrative and understand the narrative faster. Get out in front of it, be able to control it in that way. And here you're actually seeing some real teeth to some of their programs in terms of cooperation. False claims that cooperation credit, this is pretty new too, right? January of 2023, where you will get certain credit by DOJ if you voluntarily self-disclose the misconduct and then you take other steps to cooperate with them. And it has to be pretty significant cooperation. Performing, or I should say performing an internal review and providing the results, disclosing relevant material, providing information and updates and documents. All of that starts to matter in terms of how you're engaging with the DOJ. Then another piece that's becoming more important as you can imagine is electronic messaging. On the electronic messaging side, we're all using electronic messaging more and more and wanting to ensure that there are personal device policies when you have compliance programs. How are these personal devices being used? How is data being captured? How long is it being maintained? All those kinds of things that you have to think about because the government will ask if you were ever investigated by them, they're gonna wanna know what's happening with this data. And I should note too that HHS-OIG issued last November of, so November, 2023, a very thorough and very helpful guide on general compliance program guidance. If you are involved in compliance in your organization, it's a tremendous tool, and they're continuing to publish information around these exact kind of issues. So look, I've added into the slide deck a number of different cases as examples in different sectors of the industry. But what I wanna do is I wanna have a few minutes to talk to you about what happens if the government does come knocking, right? So skipping through the compliance program piece, let's talk about responding to a government investigation. It's very important to remember that you do have rights, right, it's not always just like TV. And it's also important to remember that if agents show up on your doorstep, they're trained on how to talk to folks, they're trained on how to get information, right? And they have a theory of a case. And so I think what can sometimes happen to folks is way too often they try to talk their way through something or explain something think they can outsmart the agents. And look, you're physicians, you're physicians for a reason, you're obviously very bright, you did well in school, you're accomplished, but it can be a fool's errand if you think you're just gonna be able to talk your way out of something. And the number of, I've represented lots of physicians when they get into trouble, and I can tell you very few have ever been able to talk their way out of a problem. And so these government investigations can come in a lot of different ways. You might get an investigator that reaches out in advance, they might just show up on your doorstep, or they may issue a subpoena or what's called a civil investigation demand, which is a type of subpoena by the government. They could do a search warrant, which is the most extreme version of an investigation technique. Let's talk about each of those separately. So look, it's very important that you and your staff and your employees and your colleagues understand you have every right to talk to folks from law enforcement. If law enforcement shows up at your doorstep or they show up at work, you can absolutely talk to them. But guess what? You can also refuse to talk to them too. And I sort of joke here with the fish with the hook. You know, we used to have a saying, the fish with the open mouth gets hooked. But look, it's very true that you have to realize that people, we're human beings, agents are human, they're hearing things, they're listening for certain keywords, they're trying to figure out if their theory of the case is going to be validated. So you could have great explanations and great excuses for why something happened, but it may not get documented or recorded in the way you hope it does. So it's something to think about. And what's really important, again, you can talk to them, you can have a conversation, you can also stop the conversation anytime you want. If you're talking to it with federal law enforcement or state law enforcement, and they're speaking to you about an issue or a matter that they're investigating and you decide partway through, look, you know what? I don't feel good about this. You have every right to stop it. You have every right to go get a lawyer. And so, you know, all of that is very important to keep in mind. So if you're going to talk to them, talk to them, be truthful, be honest, be candid, be thorough. The last thing you want to do is be accused of not being truthful and candid with law enforcement agents when they're talking to you. But you also have the right to say, hey, I would feel more comfortable having my lawyer present. I would feel more comfortable having someone with me. And the value in that is you have someone who understands the process with you. You also have someone who's a witness to the conversation. You know, you want to have somebody who can say, well, that's not quite what I remember someone saying. So again, these are important things for you to recall should you be in that situation. Because again, there is an element of surprise to this a lot. Sometimes they'll show up on your doorstep late at night or you're getting out of your car, going into the office, or you're getting into your car at the end of a long day. Hey, hi, we just want to talk to you. We're your friend. Again, get their card and call your lawyer and have a sit down and talk to them if you want to talk to them. I mean, that's one of the best things you can do because at least you have someone looking out for your rights and interests. But again, you know, if you talk to them, be truthful, be honest at all times. If there's a setup for an interview, they call your organization typically, right? Legal counsel or compliance will be involved in those discussions and work with you on that. A subpoena or a CID. If your organization receives something this formal, a subpoena or a CID from DOJ or a state oversight agency, your best course of action is get legal involved right away. Don't let it sit on someone's desk. Don't just push it aside. Don't think, well, we can just respond to it our own. Get your lawyers involved. You have to understand the process, understand the nuances to it, the risk that's involved with it. And also you're going to want to understand the facts because the sooner you understand the facts as an individual or an organization, you're going to have better ability to respond. It's very important. So you also, if you're an organization, you also want to have mechanisms in place to ensure that you know how to respond, that there's actually a process that gets into the right hands as soon as possible. And you can put that process into motion because there will be some time limitations on it. Again, investigators arrive unannounced, not a search warrant. Again, you want to have processes in place. You want to remind folks of the rules, right? That we just talked about. You absolutely, the employee can go talk to them. You have every right to do that. Just make sure you're being truthful and honest. But also if you're not comfortable talking to them, we can arrange to have you talk to them at a later time and have someone there with you, right? So there's all these different rules around it, or you can stop it halfway through. And again, look, someone who's talking to you may get frustrated, right? They may say, hey, look, why are you refusing to talk to us? You can't let that bother you. If you refuse or you stop partway, that's your right. You have that option and just move on and get the support you need around you. Search warrant, most intrusive. And again, a sophisticated organization will have a process in place for this. You're going to want, they're going to come in, right? They're going to be, their raid jacket's on. They're going to be fast moving. It's going to be very high stress. You're going to want to have a protocol in place. You want to know who to contact typically, right? Legal counsel right away. You're going to want to see a copy of the search warrant. Who is the team leader? You're going to want to understand what it is they're there to get. You're going to want to get a business card from the folks who are the team lead. At the end, you're going to want to receive for any property that's taken. So all these kinds of things, you're so much better off to prepare in advance for these kinds of issues. Hopefully it never happens. And it's rare that it happens, but if it does, you want to be prepared. And again, you want to protect the company's interests as well as your own personal interests or the interests of the individuals that are employed there. And so again, having a point of contact who understands what's happening, who can calm people down if you're able to send the non-vital workers home. You want to get your legal counsel involved right away so they can contact the prosecutor. And again, having that, and be polite. Be polite at all times. Don't get in the way. Don't obstruct. Don't hide anything. Don't destroy anything, right? You want to be polite, professional, get information and get your legal counsel involved. And again, send those non-essential employees home if you can, and take photos before and after. Now they may be upset if you're taking photos, but certainly if you can't do it during it, you should be able to, but if you can't, take them after. And then you want to document as fast as possible everything that occurred during that particular search. So look, we're at the hour mark, and I know I threw a lot at you, but I am open to questions. I think what you'll find is that there's a lot going on in the enforcement world, and it's important, right? In this area of the industry, if you're a physician, you're providing important, high quality care to patients. There's a lot of money involved. There's a lot of oversight involved, and the payers and the government are paying attention. And they're going to want to make sure that the quality of care and the services that are being billed are being provided in the way they should be provided. So again, appreciate the opportunity to present to you, and I wish you all the best, and thank you for joining me today. ♪♪

healthcare industry

compliance programs

fraud prevention

False Claims Act

government investigations

data mining

telemedicine

data privacy

Medicare Advantage

cyber-attacks