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Can feds pursue healthcare fraud charges if we only accept private payment from patients?

The government continues to doggedly pursue investigations of allegations of healthcare fraud. Healthcare groups and other organizations that take payments directly from patients as opposed to billing insurance may think they can avoid federal scrutiny, but this is not the case.

In a recent example, the feds investigated a couple out of Texas. The couple run a consulting company that works to get medical care for victims of personal injury cases. Their organization, Meg Health Care, puts together contracts between patients and healthcare providers. The contracts outline a payment arrangement, allowing the patients to pay for the care through proceeds from the personal injury lawsuit.

The investigation was triggered by a case moving forward in Massachusetts. In that case the prosecution is pursuing federal healthcare fraud charges against a medical device company that they claim accepted bribes from the Texas group.

What is unique about this case?

This case involves healthcare services that did not bill Medicare, Medicaid, or another government funded insurance provider. Patients paid for the services on their own. As a result, the federal anti-kickback statutes the government generally rely upon in these cases cannot apply. Instead, the government must find another way to build these cases.

This is not the first time the government has found itself in this predicament. How can it hold those it believes is trying to cheat the system without using its favorite tools? By finding another way. The government has chosen to pursue charges by using a federal racketeering law, similar to those used against members of organized crime. In fact one of the government’s first successful attempts to use this law to pursue these types of cases happened right here in Texas.

Attorney John Rivas is responsible for this communication