Federal investigators, capitalizing on the success of their multiagency work against National Medical Enterprises, are greasing the skids to increase the number of healthcare fraud convictions.
Paul Coggins, the U.S. attorney for the Northern District of Texas in Dallas, said last week that his office has 30 active healthcare fraud investigations, including ongoing work involving former NME executives and physicians associated with the hospital chain's psychiatric hospitals, which the company is in the process of divesting. Mr. Coggins said three prosecutors in his office are devoting nearly all of their time to that work.
Mr. Coggins, who spoke at the National Symposium on Health Care Fraud in Dallas, said the FBI is increasing the number of agents assigned throughout the country to healthcare fraud to 450 in 1995, up from 300 in 1994 (Oct. 10, p. 14). In addition, FBI agents soon will have access to Medicare records, he noted. In the past, those agents had to receive approval from HHS, which added time and effort.
Managed-care fraud will get increased scrutiny from federal agencies, Mr. Coggins said. He confirmed reports that the Health Care Fraud Policy Group, a Washington-based group that includes representatives from HHS, the Department of Justice and the FBI, is forming a special managed-care group.
Mr. Coggins' office is involved in a regional healthcare fraud task force, one of 12 in the country. He credited the work of such groups, which combine efforts from various federal and state agencies, with successful settlement of the NME investigation.
Earlier this year, the hospital chain settled criminal and civil fraud charges involving its psychiatric hospitals by paying $379 million in state and federal fines.
"NME is not the only case of its magnitude around," Mr. Coggins said. "It's just the first one we got to."
Although NME is working to give itself a new corporate identity, the company's name was regularly bandied about at the conference.
NME executives this month said the company's name has been tarnished and will be changed when it acquires Dallas-based American Medical International (Oct. 17, p. 2). That deal is expected to close next February.
Meanwhile, 61 plaintiffs last week sued NME in state District Court in Dallas, alleging they were lured or forced into the company's psychiatric hospitals, where they were abused. Most of the plaintiffs were children at the time of their treatment.
In addition, two investigators who spent three years working on various lawsuits against NME said the Texas suit may be the first of many. Michael Pritchard, a San Diego-based investigator, said last week that he believed another "400 to 800 suits (will be) coming out of Texas alone."
He said many of the former NME patients who were children and adolescents are waiting until they are no longer minors to sue NME.
When asked about the possibility of such litigation, NME's senior vice president, Christi Sulzbach, said that the company believed that most of the litigation was behind it. The company already has paid out more than $200 million in settlements to patients and insurance companies to settle claims of fraud against its psychiatric operations.