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The Justice Department's Criminal Division announced last week that it is “stepping up” its review of cases filed under the civil False Claims Act for potential criminal prosecutions and is committing more resources to this area. The announcement formalizes the government’s recent trend to open parallel criminal investigations for qui tam lawsuits filed by whistleblowers (referred to as “relators”) who allege violations of the False Claims Act. The potential impact on businesses, particularly healthcare providers, with ties to the government cannot be overstated and emphasizes the need to have effective compliance programs in place.

Assistant Attorney General for the U.S. Department of Justice (DOJ) Criminal Division Leslie R. Caldwell confirmed the policy in a September 17, 2014 speech placing particular emphasis on healthcare fraud, which has accounted for the bulk of the qui tam False Claims Act lawsuits and recoveries in recent years. In particular, the published remarks point to the success of the Medicare Fraud Strike Force in obtaining approximately 1,400 convictions since 2007, identify fraud by healthcare executives and corporations as high priorities, and note the existence of “numerous” ongoing corporate healthcare investigations and the DOJ Criminal Division’s determination to bring more such cases.

For more on this announcement, please see our recent Healthcare Alert It's official: Feds acknowledge increased criminal review of civil healthcare cases.

The Medicare Fraud Strike Force has been touted for its coordinated team of investigators and prosecutors in nine cities (Baton Rouge, Brooklyn, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami and Tampa). Increased scrutiny for healthcare fraud is not limited to those cities that are viewed as hotspots for healthcare fraud. For example, in Pittsburgh, a team of prosecutors and investigators is described as ramping up to fight healthcare fraud, while the local Blues plan is using data analytics to examine claims and is on pace to double its recoveries for overbilling in 2013 as compared with 2012. More on this can be found in the Pittsburgh Post-Gazette's article U.S. attorney to attack fraud in healthcare published on September 21, 2014.