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A new Justice Department health-care fraud unit in Chicago could help prosecutors focus additional resources on an increasing problem while investigating the roots of Medicare and Medicaid fraudulent practices, former prosecutors told Bloomberg BNA.
The creation of a Health Care Fraud Unit, located within the U.S. Attorney’s Office for the Northern District of Illinois, will focus on developing all types of civil and criminal cases, Joel Levin, acting U.S. attorney, said in a July 18 statement announcing the unit. Similar units exist in U.S. Attorney’s offices in Florida, Michigan, and New Jersey.
The unit will boost attention in the nation’s third-largest city to health-care fraud, in ways that reflect national priorities and may allow prosecutors to combat more structural causes rather than focus on non-connected, smaller prosecutions. Health care fraud cost taxpayers billions of dollars in fiscal year 2016, Justice Department data say.
Lisa Noller, Chicago-based Foley & Lardner LLP attorney and health-care fraud specialist, told Bloomberg BNA the Chicago area is ripe for health-care fraud cases because of the area’s large number of hospitals, medical device manufacturers, pharmaceutical companies, and health-care providers.
“It should have been a priority long ago,” she said of the new focus on health-care fraud. “I think it’s too bad there wasn’t a dedicated unit before this. We’ll see if it does anything.”
The health care fraud unit joins at least two other units within the Justice Department’s Chicago office dedicated to specific types of violative behavior, and Noller, who spent 10 years in the DOJ’s Chicago office, said those units have proven they can be effective.
The office brought relatively few securities fraud cases before a commodities and securities fraud unit was created, she said. Once formed, the unit developed in-house expertise and effective relationships with Securities and Exchange Commission staff that resulted in “really good cases,” she said.
Too many times prosecutors investigate smaller, isolated cases of health-care fraud instead of focusing on the more structural, systemic causes of the fraud, Noller said. “My hope is that a health-care fraud unit would take a look at the bigger problems, such as the reimbursement structures and the companies that are designing the [kickback] programs the foot soldiers are carrying out,” she said.
“That would be a successful unit, actually taking a look at the bigger picture,” she said.
Recent health-care fraud cases prosecuted by the Chicago office include doctors performing unnecessary medical procedures, providers submitting fraudulent bills to Medicare and Medicaid for reimbursement, and companies constructing kickback schemes to boost sales that cost the taxpayer untold millions of dollars.
The unit reflects a continuing effort to combat the increasing civil and criminal violations involving health-care payments seen in the region as well as the national focus on combating the ongoing opioid crisis, including fraud involving medical prescriptions and drug-sale practices, Rachel Cannon, a Chicago-based attorney with the firm Dentons, told Bloomberg BNA.
“I suspect we’re seeing a marriage of those two events: both an increased national priority coming out of DOJ in Washington D.C., and then Chicago’s own internal decision to make health-care fraud more of a priority than it already is,” said Cannon, who served in the DOJ’s Chicago office between 2003 and 2015.
Assistant U.S. Attorney Heather McShain will lead the unit, which will possess five prosecutors. The U.S. Attorney’s Office for the Northern District of Illinois employed 154 assistant U.S. attorneys at the end of fiscal 2016, spokesman Joseph Fitzpatrick told Bloomberg BNA.
The department is providing no additional resources to operate the new unit, he said.
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