Former U.S. Attorney: Healthcare fraud isn't increasing--detection is just getting better
In the five years he served as U.S. Attorney for the Eastern District of Tennessee, Bill Killian oversaw dozens of healthcare fraud cases. By the time he resigned from his post Dec. 5, Killian's district had collected more than $200 million from healthcare fraud cases during his tenure.
In his new position with the national law firm Polsinelli, Killian (right) will continue focusing on civil and criminal fraud cases through the firm's government investigations and compliance practice. Killian says that although enforcement numbers are continually rising, healthcare fraud is not any more prevalent now than it was in previous years--the government is just getting better at detecting it. Thanks to better detection methods, Killian says his office saw civil fraud claims increase five-fold over the course of his tenure as U.S. Attorney.
FierceHealthPayer: Antifraud spoke with Killian about the healthcare fraud landscape, the focus of government investigations and his to approach to fraud investigations.
(Editor's Note: The following has been edited and condensed for clarity.)
FierceHealthPayer: Antifraud: You served as U.S. Attorney for five years? How have you seen healthcare fraud schemes evolve over that period of time?
Bill Killian: We had several different cases that we prosecuted, everything from medical device companies overcharging Medicare, to oncologists distributing counterfeit diluted cancer drugs to their patients, to pharmaceutical companies overbilling Medicare.
The largest healthcare fraud case we settled was a medical device company that was billing for oscillating bed covers to keep people from getting bed sores. When the patients would be transferred to the hospital or a nursing home or pass away at their home, the company would continue to bill Medicare to the tune of $42 million.
That was not the total amount; that was the false claims, of course. Estimates were somewhere between $18 million and $26 million of actual overcharges.
We also had a kickback case where hospitals were providing rental space to doctors for less than market value as a kickback scheme to get them to utilize their hospital for admissions.
FHP AF: What do you attribute these large cases to? Is fraud really prevalent in that area of Tennessee?
BK: I think it's everywhere, actually. We just focused on it. I don't think East Tennessee has any more healthcare fraud than other parts of the country, and it probably has less than some areas, but it's prevalent throughout the country and it's a little easier to get away with in some respects. It takes monitoring, it takes auditing and it takes investigating. These cases, from a prosecution standpoint, are labor intensive and resource intensive and personnel intensive.
We had one doctor that the Department of Health and Human Services caught. He was one of the leading users of Botox in the country. There's only one company that makes Botox, and suddenly he went from one of the leaders in the country to not at all. So obviously something was wrong. It turns out he was buying from a foreign unapproved source, which he was distributing to the tune of $7 million.
Those are some examples of cases we've had just in our district, but it's not a problem germane to Tennessee. It's a problem nationwide. It's just good old American ingenuity. If you're a thief and you're motivated by greed, it can be utilized to effectuate whatever fraud scheme you can come up with.
The other thing I would say is that as more and more people learn about these provisions of qui tam or whistleblower action, that's going to result in more reports of fraud. Many of our civil and criminal healthcare fraud cases came in as a result of whistleblowers.
FHP AF: And based on the statistics from the DOJ, that's something that's happening across the country?
BK: Absolutely, and that will continue to grow. I'm not sure healthcare fraud is growing, I think the detection of it is growing and with the Yates memo where corporations have to report who the individuals are that are involved in the fraud schemes, now a corporation cannot pay a fine and get immunity for individuals.
That's changing the landscape of the prosecution of these kinds of cases. It remains to be seen what total effect that's going to have, but it changes the landscape in these cases, I can tell you that.
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