Are Compliance Plans Mandatory? You Decide

By David L. Schick Esq. and David B. Canning Esq.

The federal government has made it a top priority to crack down on waste, fraud and abuse in the federal health care programs.† In 2001, the OIG estimates that over $2 billion will be recovered from providers for fraud and abuseóup from $750 million in 1998.† In 2000, the government excluded 3,350 physicians from the federal health care programs and prosecuted 414 physicians.† A look at the size and frequency of recent physician settlements demonstrates the government's aggressiveness is escalating.

Penalties and government incentives.† Physician practices of all sizes across the United States are settling at an increasing rate with the federal government for astounding amounts of money due to false claims allegations.† The False Claims Act is the primary enforcement tool for the government, allowing either the government or private citizens to bring civil actions against physicians for filing false claims.† The Act provides for civil penalties starting at $10,000 per claim, plus three times the amount of damages that the government sustains.† Additionally, the Act provides for qui tam suits, or "whistleblower" suits, which are causes of actions brought on behalf of the government by a citizen.† The Act allows the whistleblower or relator to collect from 10% to 30% of the government's total recovery, plus attorney fees.† Recently terminated or disgruntled employees often bring these suits against physicians.† The government's aggressive investigative attitude, coupled with potentially lucrative incentives for citizens, has brought a serious need for all physicians to adequately protect themselves and their practices.

Government protection.† The Office of Inspector General of the Department of Health and Human Services ("OIG") released the OIG Compliance Program Guidance for Individual and Small Group Physician Practices on October 5, 2000, to assist physicians in protecting themselves and their practices.† This document establishes the basic elements or steps for an effective compliance plan, however, it is not an all-inclusive document.† The OIG document can be reviewed at www.dhhs.gov/progorg/oig/oigreg/physician.pdf

Though compliance plans are not yet mandatory, the OIG believes all providers have an ethical and legal duty to ensure the integrity of their dealings with federal health care programs.† The OIG fully expects every physician practice to have an effective compliance plan in...