The Office of the Inspector General (OIG) of the Health and Human Services Department (HHS) recently announced that it will be holding the Chief Executive Officers (CEOs) of Fortune 500 companies in the health care industry personally accountable for fraud and that they will be subject to criminal charges on top of the fines levied on their corporations. The OIG is adopting this new posture because of the repeated violations of many of these Fortune 500 companies, that, upon being caught, simply have promised not to do it again, wrote out a big check to Uncle Sam, and then passed the costs of the fines onto the consumers.
Why is the OIG targeting the CEOs of the Fortune 500 companies in the health care industry? Because it is not the little guys running Medicare fraud scams that are killing us. It’s fraud on the industrial basis that costs us the bulk of the money. The big health care companies commit more Medicare and Medicaid fraud than anyone else by a long shot. That’s not just conjecture, it’s fact.
In 2010 the Department of Justice recovered $669 million from Pfizer, $302 million from AstroZeneca, and $193 million from Novartis. And that’s just the monies that they recovered under the Fast Claims Act.
So why go after executives? Because the fines offer no disincentives at all. They just see it as a cost of doing business and they move on with their lives. It’s the executives who are getting rich off of these scams.
Now the health care industry says punishing these executives isn’t fair. But the Feds say that it’s the only way to get these companies to insist on real accountability. With the executives ass on the line, believe me he’ll be checking twice to see if the company is ripping off the government.
Now just think about it, if this policy had been in place in the 1990s, Rick Scott might have faced jail time instead he ended up in the Florida governor’s mansion. As Suzy Khimm of Mother Jones points out, Florida Governor Rick Scott’s company, HCA/Columbia, had to pay a record $631 million for a huge Medicare fraud case in 1997. Scott resigned but he said that he didn’t know anything about the fraud and he didn’t face any charges.
He didn’t know that his company was running a record-breaking Medicare scam at his company?! Come on! Of course he knew about it. And that’s why executives should be held responsible. They are the ones pushing these programs, and they are the ones making money off of it. So if you are going to do the crime, you got to do the time. So I love this new program.