Capping off a week of major healthcare fraud developments, the U.S. Justice Department reiterated at a Friday press conference that while it will make an effort to work more closely with hospitals and other providers, it has no intention of lessening anti-fraud efforts.
And as if to punctuate that position, the Justice Department notified Olsten Corp. and two of its subsidiaries that they are targets of a federal grand jury investigation into possible violations of criminal laws. Olsten disclosed the notification late Friday.
The Melville, N.Y., company, which owns Olsten Health Management and Olsten Health Services, said it believes that this investigation focuses on its relationship with Columbia/HCA Healthcare Corp., which itself is the target of a nationwide fraud investigation.
In an affidavit partially unsealed in February, federal enforcers charge that Columbia was buying home-care businesses from Olsten at low cost and then paying a sister company, Olsten Health Management, handsome fees to manage them (Feb. 16, p. 2).
The Justice Department's press conference statements were in response to a report released last week by the American Hospital Association that said claim errors are caused by confusing Medicare billing rules, not intentional acts of fraud by hospitals (See stories, pages 2 and 3).
According to Joyce Branda, deputy director of the commercial litigation branch of the department's civil division, if the AHA-backed bill to modify the federal False Claims Act were enacted, it would be nearly impossible to prosecute healthcare fraud.
In fact, one of federal authorities' most celebrated healthcare fraud settlements would never have happened, Branda said.
She said the case against SmithKline Beecham would have been exempted if the AHA-backed bill had been law. SmithKline, with U.S. headquarters in Philadelphia, paid $325 million last year to settle charges that it billed Medicare for tests not requested or performed and paid kickbacks to physicians.
Branda said the AHA bill would require a minimum level of improper billings before the federal False Claims Act could be applied.
---With Kristen Hallam