Too Good to Pass Up — Why Certain Industries Seem More Prone to Repeated Fraud
Why Certain Industries Seem More Prone to Repeated Fraud
Any time the United States is paying for a particular item or service, chances are high that someone is devising ways to game the system and violate the False Claims Act (FCA). Certain industries and specialties are more prone to fraud and abuse than others. Our law firm, Barrett Johnston Martin & Garrison, PLLC, stays on top of the latest developments involving health care fraud and False Claims Act cases to represent whistleblowers in cases all over the country.
The dialysis industry is a frequent target of FCA complaints and Department of Justice (DOJ) investigations. Last year, DaVita, Inc. agreed to pay $34 million to settle allegations that it paid kickbacks to induce referrals to DaVita dialysis clinics and its wholly owned pharmacy, DaVita Rx, in violation of the Anti-Kickback Statute (AKS) and FCA (See the DOJ Press Release here for more details).
This was not the first FCA settlement for DaVita. Over the years, both DaVita and its primary competitor, Fresenius, have resolved FCA and other fraud cases with allegations ranging from unlawful kickbacks to unnecessary Hepatitis B testing.
The more an industry or business depends on referrals for its survival, the greater the temptation will be to offer kickbacks to ensure that those referrals keep coming. In the world of dialysis, for example, clinics live or die based on referrals from patients’ treating nephrologists. Likewise, in the world of pharmaceutical sales—another fraud-prone industry—there are few things more valuable than a physician willing to prescribe large quantities of your new and expensive drug. The list goes on and on.
None of this is to discount the role corporate culture can play—there are good actors and bad actors in every industry. At the same time, some industries seem to have a higher share of bad actors than others and tend to see the same types of schemes over and over. There is no single answer to why this is, but the role of referrals definitely plays a major role. The more important it is to any industry to find and protect referral streams, the more common it is for company reps to bend the rules and grease the wheels to make sure that those referrals come to them instead of someone else. If you have information or questions regarding a potential case of health care fraud, FCA violations, or kickback schemes, schedule a free and confidential consultation with our firm.
