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In a criminal case, the prosecutor has the burden of proving the defendant’s guilt beyond a reasonable doubt. In a civil case, the plaintiff has the burden of proving his or her case by the preponderance of the evidence.
Government has its own bar
However, when it comes to combatting health care fraud, the bar for proving violations appears to be even lower. Specifically, when it comes to proving false claims, the government doesn’t need to prove that the number of alleged claims are false, but rather, there is a PROBABILITY that the number of alleged claims are false.
Lies, Damn Lies and Statistics
The government can use statistical sampling to prove fraud. In other words, the government can pull a small number of claims, and based on the number of potentially false claims found in that sample, extrapolate that percentage to the health care provider’s universe of claims for a specific period of time.
Government can “guestimate”
So rather than having to review each and every claim in order to prove its case, the government can basically guestimate.
The reason the government is allowed to take this short-cut to proving its case is, as one court put it, given “the enormous logistical problems [that enforcement agencies face in fighting fraud], statistical sampling is the only feasible method available.”
Doesn’t work well for providers
While that may be good for the government, it doesn’t work out so well for providers. Particularly, the government can recover treble damages for each claim ranging from $5,000 to $11,000 per false claim. For example, if the government finds what it considers fraud in five percent of the claims its samples, and extrapolates that percentage over 5 years and 20,000 claims, then the provider could potentially owe $5,000,000 to $11,000,000 in damages.
Case Law - 1
In a 2014 case, United States ex rel. Martin v. Life Care Centers of America, the government sampled 400 patient admissions to extrapolate liability for a total of 54,396 admissions for a specific period. Although the defendant contested the use of statistics to determine levels of fraud, the court sided with the government. The court concluded that the inferential samples were both reliable and relevant even though there are better or more accurate methods for identifying fraud.
Case Law - 2
In another recent case, United States ex rel. Richardson v. AseraCare Inc., et al., the government sampled 233 claims to prove the number of false claims in a universe of 2,181 claims. In that case, the court stated that “statistical evidence is evidence.”
The Importance of Having an Effective Compliance Plan
The fact that the government does not have to prove every aspect of its case is worrisome. The government’s use of statistics forces the provider to either prove that each alleged claim is not fraudulent or settle. All of this leads one to think that the government’s burden of proof is very low while the provider’s burden is enormous, with a lot to lose in terms of fines, penalties and possible exclusion from Medicaid and Medicare programs.
Pressure on providers
While the government will continue to use statistics and other technology to ease its burden of proofing false claims, health care providers face increased pressure to demonstrate compliance. Only by having an effective compliance plan can providers mitigate the effects of a government investigation.
A compliance program can reduce fines
One study showed that having a compliance plan can reduce fines and penalties by as much as 90 percent. Additionally, the federal sentencing guidelines require courts to consider a provider’s compliance plan as a mitigating factor in sentencing. Minimally, having an effective compliance program would allow a provider to conduct its own sampling of claims and identify and correct potential billing inaccuracies.
The Affordable Care Act requires all Medicaid and Medicare providers to have a compliance program. Given the arsenal of tools and resources that the government has at its disposal, providers should ensure that they have an effective compliance program to minimize the impact of any government investigation.
For More Information visit http://starcomplianceservices.com/ or http://compliancestarterkit.com/