Putting Up With a Health-Care Racket


Racketeering. It’s a loaded word.

What did you think of when you read it?

Was it Al Capone or John Gotti? Maybe you envisioned mobsters in zoot suits and fedoras carrying tommy guns while smoking cigars in the back alleys of Chicago during Prohibition.

Or maybe you thought of the mobsters made famous in Hollywood. Marlon Brando’s portrayal of Don Vito Corleone offering deals you can’t refuse in “The Godfather” or Jimmy Conway, played by Robert De Niro, orchestrating a hit in “Goodfellas.”

Pretty easy to see why a health-care provider would shudder at the thought of the word racketeering being connected to their business. And yet that is happening as some plaintiffs and their attorneys are using the Racketeer Influenced and Corrupt Organizations Act (RICO) to bring health-care fraud cases.

In the past two weeks, I’ve published two stories on this phenomenon: Pennsylvania Health Network Accuses Hospital of Running Racket and Health-Care Fraud's Hammer: An Organized Crime Law.

And I have to admit, I’m not sure how successful civil litigation using RICO will be in the health-care context. Because of the underlying criminal aspect, there are some high bars for a plaintiff to meet.

The use of RICO strikes me as a PR move. A way to embarrass your opponent; the ultimate way to drag a provider you think did you wrong into the mud.

Look at any hospital or provider’s website. You see smiling doctors and nurses in pristine offices holding stethoscopes up to the chests of smiling patients (Side note: Ever notice how nobody ever looks sick in those hospital pictures?).

The opposite of these unrealistically blissful photos is racketeering. It’s a smudge the provider has to spend lots of time trying to scrub away, trying to convince its patients and community that it’s a legitimate business you want to use for your health-care.

That’s why some of the lawyers I’ve talked to say they warn clients about bringing allegations under statutes like RICO.

Many providers have agreements to work together. A RICO charge can ruin that and, as we all know, what goes around comes around.

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