Senator Ted Kaufman (D-DE) introduced the Health Care Fraud Enforcement Act of 2009, co-sponsored by Committee Chairman Patrick Leahy (D-VT) and Committee members Arlen Specter (D-PA), Herb Kohl (D-WI), Chuck Schumer (D-NY) and Amy Klobuchar (D-MN), on October 28, 2009, follwing a Senate Judiciary Committee hearing on “Effective Strategies for Preventing Health Care Fraud.”

This new bill is meant to improve on the fraud-prevention efforts included in the Finance and Health, Education, Labor and Pension (HELP) Committee’s comprehensive health care reform bills, and intends to further strengthen the government’s capacity to investigate and prosecute waste, fraud and abuse in both government and private health insurance.

As submitted, the bill offers improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering, and obstruction statutes, all of which would strengthen prosecutors’ ability to combat this particularly destructive form of fraud. These improvements include:

• Sentencing increases:  The bill directs the Sentencing Commission to increase the guidelines range for health care fraud offenses and clarifies that the full potential scope of the fraud should be considered at sentencing.
• Redefining “health care fraud offense”:  The bill includes all health care crimes within the definition of “health care fraud offense,” regardless of where they are codified.  (ERISA, drug marketing, and kickback crimes are currently not included)  This change will make available to law enforcement the full range of antifraud tools, including criminal forfeiture and obstruction penalties, to combat these offenses.
• Improving whistleblower claims: kickbacks lead to unnecessary and risky medical care and pervert the doctor-patient relationship.  This bill clarifies that all payments made pursuant to illegal kickbacks are false for purposes of the False Claims Act.
• Creating a common-sense mental state requirement for health care fraud offenses: some courts have held that defendants must be aware that their conduct violates a specific provision of criminal law in order to be held accountable. This bill restores the original intent of Congress that a person is guilty of a health care offense if he knowingly does what the law forbids.
• Increasing funding:  Money spent on health care fraud prevention and enforcement is returned manifold through costs savings and civil and criminal recoveries.  This bill authorizes a modest, yet significant, increase in federal antifraud spending of $20,000,000 per year through 2016.

One of the bill’s stipulations addresses what Senator Kaufman described as “confusion in the case law over the appropriate meaning of ‘willful’ conduct in health care fraud.” Similar to stipulations in the Senate Finance Committee’s health care reform bill (American’s Healthy Future Act), this bill clarifies the defintion of “willful conduct.” In current anit-kickback and health care fraud statutes, The Ninth Circuit Court of Appeals has read the term “willfully” as requiring proof that a defendant not only intended to engage in unlawful conduct, but also knew of the particular law in question and fully intended to violate that particular law. The new bill’s authors see this as a “special protection” that health care fraudsters do not deserve and should not receive. The Health Care Fraud Enforcement Act clarifies “willful conduct” in this context so that it requires neither proof that the defendant had actual knowledge of the law in question nor proof that they had specific intent to violate that particular law.

The bill also provides the Department of Justice (DOJ) with a new subpoena authority for investigations conducted pursuant to the Civil Rights for Institutionalized Persons Act, also known as CRIPA.

Under CRIPA, the Civil Rights Division of the DOJ investigates conditions in publicly operated institutions, such as nursing homes, mental health institutions, facilities for persons with disabilities, residential schools for children with disabilities, as well as jails and prisons, where there has been an allegation of pattern or practice of violating residents’ federal civil rights. Under CRIPA, only injunctive relief is available; the statute does not provide for the award of damages. Also, under current law, the absence of subpoena authority enables non-cooperating jurisdictions (i.e., those jurisdictions that decide to only fully respond to a subpeona) to obstruct and delay the Division in its investigations. The new bill authorizes the DOJ to issue subpoenas for access to any institution that is the subject of an investigation related to a violation of CRIPA, and for any documents, records, materials, files, reports, memoranda, policies, procedures, investigations, video or audio recordings, and quality assurance reports of such institution.

In another significant area, this new bill corrects an apparent drafting error by providing that obstruction of criminal investigations involving administrative subpoenas under HIPAA, the Health Insurance Portability and Accountability Act of 1996, should be treated in the same manner as obstruction of criminal investigations involving grand jury subpoenas.

Follow the progress of this bill and find the full text plus other related documents, here.

Additional Source: website of Ted Kaufman, US Senator for Delaware