Reprinted from Health Reform Watch:
On September 23rd, 2010, Paul J. Fishman, United States Attorney for the District of New Jersey, provided insight into his state’s approach to prosecuting health care fraud. He spoke here at Seton Hall Law School, presented by our Center for Health & Pharmaceutical Law & Policy.
First, some background on the U.S. Attorney. Mr. Fishman graduated magna cum laude in 1978 from Princeton University and cum laude in 1982 from Harvard Law, where he served as the Managing Editor of the Harvard Law Review. After a clerkship with the Hon. Edward R. Becker of the U.S. Court of Appeals for the Third Circuit, he became an Assistant U.S. Attorney for the District of New Jersey, where he served as Deputy Chief of the Criminal Division, Chief of Narcotics, Chief of the Criminal Division, and First U.S. Attorney. From 1994 to 1997, Mr. Fishman served as a senior advisor to the Attorney General and Deputy Attorney General of the United States on a variety of law enforcement, policy, legislative, national security, and international matters, as well as on specific investigations and prosecutions.
Mr. Fishman’s talk, entitled “Why Prosecuting Health Care Fraud is a Top Priority in New Jersey,” drew a diverse crowd comprised of professors and law students from Seton Hall, as well as many in the health care industry and government who were presumably keen to divine the U.S. Attorney’s future prosecutorial plans. The talk opened with an acknowledgment that the Department of Justice (DOJ) and the Department of Health & Human Services are working more closely than ever in terms of combating health care fraud. Mr. Fishman noted the importance of this relationship given the myriad opportunities for health care fraud that present themselves throughout the sector’s vast supply chain.
At the outset, Mr. Fishman underscored his desire to leverage emerging technology to better distill trends in the flow of health care dollars in New Jersey. Such analytical technology — already being employed in New Jersey — can help detect anomalous spending patterns that may signal potential fraudulent activity.
Mr. Fishman stated that over the next few years, the number of cases being prosecuted will go up, including both criminal and civil fraud prosecutions. Recognizing the budget shortfall facing New Jersey, Mr. Fishman was quick to note that DOJ is in fact cash flow positive, citing research finding that the DOJ collects $4 for every 1$ spent on investigations.
The U.S. Attorney discussed New Jersey’s unique demographics. With over 100 hospitals, 360-plus nursing homes, 200 private pay home care agencies, and scores of pharmaceutical companies, the New Jersey health care industry is robust — making it a sizable target for health care fraud.
But as Mr. Fishman notes, it is not just the medical-industrial complex that distinguishes the Garden State’s health care landscape: 38 percent of NJ’s population is overweight, the state ranks ninth in the U.S. in terms of the percentage of elderly residents, and it spends 20 percent more on health care spending on the elderly than the national average. These statistics, according to Mr. Fishman, make the New Jersey health care system an even larger opportunity for fraud.
Mr. Fishman noted a number of specific areas of criminal activity that his office will be focusing on, including:
- Cases in which people are providing services in a way that is “inconsistent with their stature in the health care industry.” This category would include, for example, individuals pretending to be licensed physicians.
- Prosecuting fraudulent prescriptions that are written for unneeded services. Mr. Fishman mentioned fraudulent activity in the durable medical equipment field as an example.
- Staged accidents that seek to defraud the reimbursement system.
- Traditional Stark and Anti-kickback issues.
On the civil side Mr. Fishman mentioned a desire to reach out to those representing qui tam relators, presumably in an effort to increase the number of qui tam cases brought to his New Jersey office. Mr. Fishman’s qui tam discussion was followed by his general goal of broadening outreach efforts so as to take advantage of the possible early detection of fraud by individuals who may spot a fraudulent activity before such activity is formally recognized. Accompanying greater outreach efforts will be a tighter integration between the criminal and civil investigatory arms.
Mr. Fishman rounded up his talk with a discussion of deferred prosecution agreements — noting that while the DOJ often places a huge premium on resolving suits they have not historically focused enough on individual culpability. Accordingly, Mr. Fishman expressed a willingness to go after individuals, and not just corporations, for their actions — predicting an increase in individual prosecutions but maintaining that rates of corporate prosecutions will hold steady.
On the topic of the monitorships that take place in response to non-prosecution and deferred prosecution agreements, Mr. Fishman posited that the monitors should be located in or near the city in which the health care entity is headquartered. Thus, the New Jersey office will be encouraging those in non-prosecution and deferred prosecution to look for monitors in their area. Furthermore, monitors should not have clients with interests that are adverse to the DOJ office, and remained skeptical of the propriety of having white collar defense lawyers acting as the monitors of first resort, notwithstanding their skills. Rather, it is thought that health care entities should look outside the criminal defense bar for monitors, while ensuring that the entity has the requisite integrity and experience to tackle highly complex health care law issues.
In conclusion, Mr. Fishman underscored that deterrence was his guiding principle, with the ultimate goal being the wholesale prevention of health care fraud. Mr. Fishman focused on institutional shortcomings — particularly the lack of a robust relationship between his Office and the health care industry — as a reason his office has failed to sufficiently prevent health care fraud. However deficient DOJ’s approach to health care fraud has been, the zealousness and creativity of the newly-appointed Mr. Fishman should make even the most seasoned New Jersey health care fraudster nervous.
