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April 24, 2014

U.S. Attorney for the Northern District of New York Announces Two False Claims Act Initiatives

In recent months, the U.S. Attorney for the Northern District of New York ("Northern District Office"), Rick Hartunian, and Assistant U.S. Attorney, Adam Katz, have announced, through a series of presentations and programs, a two-pronged initiative focused on healthcare provider violations of the Federal False Claims Act ("FCA").

At a March 26, 2014 meeting of the Iroquois Healthcare Association held at Turning Stone Resort, Mr. Hartunian and Mr. Katz identified that the first prong will include reviewing claims submissions from certain of the 56 hospitals located in the Northern District with the likely focus on the following areas: (1) same day hospital readmissions; (2) E&M up-coding; (3) observation and short inpatient admissions; (4) admissions with conditions "present upon admission"; (5) use of uncredentialed providers and imaging services; and (6) tests performed without physician orders. Mr. Katz's position is funded in part through the National Health Care Fraud and Abuse Control ("HCFAC") Program and is designated as the Northern District's Health Care Fraud Coordinator. Mr. Katz indicated that his office and other federal agencies use data mining and other tools to help identify outlier hospitals that could lead to further investigations to determine whether compliance issues exist. The second prong of the Northern District initiative is the strengthening and enhancement of a qui tam program. The FCA includes a powerful tool that protects whistleblowers and enables them, through use of what is known as a qui tam lawsuit, to be handsomely rewarded if funds are recovered for the government. In October 2013, Mr. Katz presented to the American Academy of Professional Coders (AAPC) during which he discussed the FCA and the benefits and protections granted to a whistleblower. (It recently was reported that a recent qui tam settlement resulted in a $565,500 award to a physician who commenced a lawsuit related to the use of uncredentialed providers in the performance of imaging tests and studies.)

Mr. Hartunian and Mr. Katz have repeatedly stated that they have no desire to "put hospitals out of business" and have indicated their willingness to meet with providers and compliance officers. They have stated that it is their goal to develop a relationship with the providers in the Northern District, and that the development of a constructive relationship could benefit providers who behave as good corporate citizens, are proactive in their compliance efforts and adhere to the acknowledged complicated maze of health care regulation. One potential benefit to providers who proactively communicate with the Northern District Office to self-disclose potential violations is that it could result, for example, in reduced multipliers on FCA damages and penalties or possible release from FCA actions under appropriate circumstances; a power held only by the Department of Justice of which the U.S. Attorney's Office is a part.

This initiative is yet another example of the ramped up efforts by government to address waste, fraud and abuse within the health care system. The approach recognizes that the vast majority of providers are good citizens struggling with a rapidly changing complex health care environment, a complicated maze of regulations, and changing technology and payment methodologies. Although providers may feel like "dolphins caught in the tuna nets" cast by government, the Northern District initiative provides an opportunity for providers to bolster existing compliance programs with an increased focus on monitoring, auditing and incorporation of a culture "of doing the right thing" into the fabric of the organization.

If you require further information or assistance regarding the information presented in this Legal Alert and its impact on your organization, please contact James D. Horwitz, at (518) 429.4283 or, or Linda J. Clark at (518) 429-4241 or

The content of this alert is intended to convey general information and is a resource of general information to Iroquois Health Association members. None of the information should be considered legal advice on any subject matter.


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