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Ken Julian Points How Major Healthcare Frauds Has Originated From Within The System  During COVID

The instances of scams and frauds keep increasing with every passing day. As the world continues to struggle with the Covid-19 pandemic, the instances of healthcare related frauds have become all the more prominent. Ken Julian mentions that healthcare frauds hurt just about all people in the society. The diversion of funds taking place owing to these frauds often end up reducing the benefits given to people who actually need them. Julian is a partner of the health care litigation practice at Manatt, Phelps & Phillips, and has a good knowledge of healthcare related frauds.

Amidst the Covid-19 crisis, the United States Department of Justice has brought healthcare fraud to the forefront of its priorities. Ken Julian says that earlier this year, the DOJ ended up indicting a woman in Michigan for embezzlement of government property. She was alleged to have continued submitting claims for patients who did not qualify for home health services through a facility that had already closed down in early 2020. The woman collected more than one million dollars in Medicare benefit payments, which were used for gifts to family members and to pay off personal expenses.

Coming to an even bigger case of healthcare fraud, Ken Julian talks about Galena Biopharma Inc., a major California based pharmaceutical company.  The DOJ announced that this company had agreed to pay a civil penalty of more than $7.55M to resolve allegations that it had violated the False Claims Act by issuing kickbacks to varying healthcare providers for prescribing their fentanyl-based drug, Abstral.

According to the investigation and subsequent indictment of the United States Department of Justice, Galena Biopharma Inc. had paid several types of kickbacks in order to encourage doctors to prescribe Abstral to their patients.  These kickbacks included over eighty free meals to physicians and staff from a single, high-prescribing practice. They even paid around approximately $92K to a physician-owned pharmacy to prescribe Abstral. Galena Biopharma Inc even planned an ‘advisory board’ in which doctors and speakers were paid $5k and $6k respectively to attend. As the company was indicted for its role in healthcare fraud, they cooperated in the prosecution of the two doctors who received kickbacks from them. In this particular case, the doctors received prison sentences after conviction and a jury trial.

Ken Julian mentions that much like the case of Galena Biopharma Inc, a large amount of healthcare frauds originate from within the system itself. Healthcare providers are the ones who tend to be at the best place to mimic legitimate transactions with complicit doctors and other professionals. Like Galena Biopharma Inc. took part in fraudulent activities by paying off doctors, there are several instances as well where complicit doctors and other medical professionals having the capability to manipulate or bypass internal controls take part in frauds for their personal gain. As these frauds take place from inside the system, detecting them becomes extremely complicated.

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