Healthcare frauds are quite a common type of white-collar crime. These fraud cases were high in number in the United States even before the Obama Administration’s Affordable Care Act. Ken Julian points out that unfortunately, the public awareness in regards to such crimes has mostly been quite low as they hardly managed to make it to the front page news. While media focused on Enron, WorldCom, and Adelphi scandals, healthcare frauds remained in the background.
There is no dearth of cases associated with healthcare frauds in the society. A number of them keep cropping up across the nation quite regularly. Providing an example of such fraud, Ken Julian sheds light upon a case in which a Michigan based woman was indicted by the United States Department of Justice. She was charged with embezzlement of government property, which alleged that she continued to submit claims for patients who didn’t qualify for home health services through a facility that was not in operation. The home health facility from where she submitted claims was closed down sometime in early 2020, but continued collecting more than $1M in Medicare benefit payments. These payments were largely used up for meeting personal expenses and getting gifts for family members.
The fraud associated with Galena Biopharma Inc. is another major case that Ken Julian sheds light upon. As a partner of the health care litigation practice at Manatt, Phelps & Phillips, Ken has the ideal background to talk about healthcare fraud cases. He discusses how Galena Biopharma Inc. agreed to pay a civil penalty of more than $7.55M in order to resolve allegations that it had violated the False Claims Act by issuing kickbacks to physicians and discerning other healthcare providers to prescribe a fentanyl-based drug known as Abstral, which is offered by the company. According to the investigation done by the Department of Justice, Galena had paid several types of kickbacks with the aim of inducing doctors to prescribe Abstral to their unsuspecting patients. These kickbacks even included more than 85 free meals to doctors and staff belonging to a, high-prescribing practice. An ‘advisory board’ was additionally by the Galena sales team members, which doctors and speakers were paid $5K and $6K respectively to attend, plus expenses. Galena also paid around $92K to a physician-owned pharmacy to prescribe Abstral.
Subsequent to they were indicted, Galena Biopharma Inc. cooperated in the prosecution of the two doctors who received kickbacks from them. In this particular case, these physicians received prison sentences after conviction following a jury trial. In a statement from former Deputy Attorney General Rod Rosenstein, he pointed out that prosecuting individuals in addition to corporations can be helpful in deterring white-collar crimes and healthcare fraud, as individuals have a lot more to lose than any corporate organization in such situations. They may get jail time, lose their medical license, or/and have their professional reputation damaged. Corporations, on the other hand, mostly get away with just paying fines.