You've likely heard stories about questionable billing practices and other activities at O&P facilities that don't fully comply with legal requirements. Some of these regulations might seem excessive, but whether you agree with them or not, compliance is mandatory. Even something as seemingly minor as waiving a patient’s financial responsibility without proper documentation can lead to significant issues. Always review your contracts—many payers can reclaim payments if you fail to collect the patient portion and can't prove you made the effort. 

We throw the words “Fraud” and “Abuse” around, but do you know what they mean?   

Fraud is an intentional act of deception or misrepresentation made with the knowledge that it could result in unauthorized benefits or payments. For example, billing for two check sockets when only one was made is fraudulent. Key aspects of fraud include:  

• Deliberate deception or false representation of facts 

• Intent to gain an unfair or dishonest advantage 

• It often results in financial or personal benefits obtained illegally 

• It can lead to criminal charges and severe penalties 

Examples of healthcare fraud include: 

• Billing for services not actually provided 

• Falsifying a patient's diagnosis to justify unnecessary procedures 

• Altering claim forms to obtain higher payments 

• Using another person's Medicare card to obtain medical care 

Abuse refers to practices that are inconsistent with sound fiscal, business, or medical practices, resulting in unnecessary costs or improper payments. Key aspects of abuse include: 

• It may be intentional or unintentional 

• Misuse or overuse of resources or systems 

• It results in unnecessary costs or improper payments 

• It does not necessarily involve deliberate deception 

• It typically leads to administrative actions rather than criminal charges 

Examples of healthcare abuse include: 

• Excessive charges for services or supplies 

• Providing medically unnecessary services 

• Breaching Medicare participation agreements 

• Improper billing practices 

The main difference is that fraud involves intentional deception for gain, while abuse involves improper practices that may be unintentional but still result in unnecessary costs. 

By now you have certainly heard of the expanded allowance for advanced prosthetics for K2 ambulators. I am not here to talk about that.  But I think it is interesting that on August 1, 2024, the Department of Justice (DOJ) launched a three-year pilot program to uncover and prosecute corporate crime, including healthcare fraud. This initiative, announced by U.S. Deputy Attorney General Lisa Monaco, aims to incentivize whistleblowers to report misconduct that might otherwise go unreported. 

Under this program, individuals who provide original information or analysis relating to financial crimes, bribery, or healthcare fraud could be eligible for an award of up to 30% of any assets forfeited as a result of their information. Key points of the program include: 

• Whistleblowers who report misconduct to both their employers and the DOJ may receive higher awards. 

• Companies that disclose a whistleblower report within 120 days and before being contacted by federal prosecutors may be eligible for leniency under a corporate voluntary disclosure program. 

• Executives and individuals who are the organizers or leaders of the misconduct are not eligible for the new immunity policy. 

The program will apply to several types of misconduct where officials are looking to “step up enforcement” including include healthcare fraud involving private companies. “With very few exceptions, you need to be first in the door,” Monaco said Thursday. “And when everyone needs to be first in the door, no one wants to be second. Suddenly everyone is racing up the front steps, all hoping they’re the first to knock.” 

In April, the DOJ also announced a program aimed at executives, allowing them to enter into a "non-prosecution agreement" if they voluntarily provide original information, cooperate with prosecutors, and agree to give up any profits derived from the reported misconduct. This program covers a range of misconduct, including financial and healthcare fraud, money laundering, and corporate bribery. 

Nicole Argentieri, head of the DOJ’s criminal division, emphasized that the policy is designed to pressure companies to disclose misconduct before their employees do. "The department is upping the ante...by increasing the incentives for others to come forward," she said. “Call us before we call you!” 

Chief executive and financial officers won’t be eligible for the new immunity policy, according to the Department. The policy also excludes individuals who prosecutors determine are the organizer or leader of the misconduct being reported. 

The move by the Justice Department’s criminal division is part of changes to the agency’s corporate enforcement policies in recent years. Deputy Attorney General Lisa Monaco in 2022 tasked the various components of the Justice Department that deal with corporate crime, including its U.S. attorneys’ offices, with developing programs that offer companies rewards for self-disclosing conduct.  

Compliance with legal and contractual obligations is crucial for O&P facilities. Understanding the distinctions between fraud and abuse and staying informed about new initiatives like the DOJ's whistleblower program, can help you navigate the complex landscape of healthcare regulations. Compliance is not something to take lightly, and staying ahead of potential issues can save you from significant legal and financial troubles.