For the last couple of years I have been telling my physician and provider clients that they should expect to see a dramatic rise in healthcare health fraud investigations and prosecutions. According to a recent article published by USA Today citing statistics released by the Transactional Records Access Clearing House, my prediction (albeit a fairly easy one) is proving to be true. According to the USA Today article, federal healthcare prosecutions for 2011 are on track to increase 85% over 2010, and fraud prosecutions have gone up 71% from five years ago. In addition, according to Justice Department statistics, there have already been more Medicare fraud trial convictions in the first eight months of 2011 than there were in 2010.

The spike in fraud investigations and prosecutions should come as no surprise given that the Obama administration has placed heavy emphasis on fraud, waste and abuse recoupment as a means of funding new healthcare reform legislation. On top of this, healthcare enforcement authorities are using new and more advanced means (e.g., enhanced technology and cooperative task force operations) to identify fraud and abuse. And, frankly, there is still plenty of fraud, waste and abuse in the system. It is often said that desperate times lead to desperate measures and as the economics of healthcare delivery get tighter, I expect we will see healthcare providers more willing to enter into riskier arrangements than they might in better economic times. All of these factors of course spell a potential “perfect storm” from a healthcare compliance perspective, so physicians and providers should take careful stock of there compliance efforts, including regular documentation and billing audits and a regular review of contractual arrangements to ensure compliance with applicable federal and state fraud and abuse legislation.