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‘Moneyball’ phase: Federal prosecutors explore role of big data in health care fraud

Jeffrey B. Jensen

Jeffrey B. Jensen, U.S. Attorney for the Eastern District of Missouri, addresses federal health care enforcement priorities during a panel discussion in September.

Big data has created a whole new ballgame for federal investigations of health care fraud, according to a panel of experts who addressed prosecution trends at The Missouri Bar’s Annual Meeting Sept. 20 in Branson.

The panel discussion included Timothy A. Garrison, U.S. Attorney for the Western District of Missouri; Jeffrey B. Jensen, U.S. Attorney for the Eastern District of Missouri; and Matthew T. Schelp, a former assistant U.S. attorney at Husch Blackwell in St. Louis.

Schelp — who previously served as deputy health care fraud coordinator in the U.S. Attorney’s Office in the Eastern District of Missouri — said he’s observed a large shift in how the federal government handles health care fraud cases in the nearly 10 years he’s been in private practice.

“What I like to say when I talk to people about this is we’re in sort of the ‘Moneyball’ phase of these prosecutions,” said Schelp, who in November was nominated for a federal judgeship. “The government is extremely effective at crunching the numbers and coordinating the data.”

He said it’s critical for defense counsel to realize that “when you get that first call from the government, it’s like seeing the tip of the iceberg.”

“Under the water, there’s a lot of work that’s [already] done, and you need to be wary of kind of how you approach the case, understanding there’s probably been a lot of work done already,” he said.

Schelp said data analysis is fueling the shift he’s seen, and far more coordination between public and private insurers and the government takes place behind the scene.

While whistleblowers still initiate investigations, Schelp said insurers themselves are frequently bringing their concerns about various health care providers or entities directly to prosecutors — with data in hand.

“You’ll get a subpoena, and it’ll look somewhat innocuous but no subpoena is innocuous,” he said. “It’s much different than it was when local agents were trying to go through the data to try to craft a case —   it’s just far more sophisticated right now.”

Matthew Schelp

Attorney Matthew Schelp, left, said he’s seen a large shift in the federal government’s handling of health care fraud cases in recent years. He spoke with Jeffrey B. Jensen, center, U.S. Attorney for the Eastern District of Missouri, and Timothy A. Garrison, U.S. Attorney for the Western District of Missouri, right.

Jensen agreed. He said prosecutors constantly receive streams of data from a variety of sources, among them Medicare, Medicaid and the majority of the counties of the state of Missouri.

“You can get some pretty good trends from that amount of data,” he said.

Prosecutors look for outliers in the data, Jensen said, using a hypothetical example of a doctor prescribing excess amounts of a certain prescription pill.

“Well, if they’re an organ-transplant place, OK — maybe [it’s legitimate],” he said. “If they’re a dentist in Palmyra Missouri, OK — maybe not.”

After identifying outliers, Jensen said prosecutors drill down further into the data. Continuing his hypothetical about a physician overprescribing certain medications, he explained that a prosecutor would look at how many pills were prescribed, how far people traveled to see the provider and what kind of combinations of drugs were prescribed together.

“Was it a trifecta of an opioid, some sort of a methamphetamine like an Adderall and a muscle relaxer?” he said. “Those three altogether are high indicators of an overdose death within 30 days of a prescription and we just have all this data — you can look for the true outliers.”

“For us, that’s enough to open a case. That’s enough to open a civil case,” he said.

In addition to insurers, a number of large companies headquartered in Missouri also are awash in data, Schelp said. He pointed to Centene and Express Scripts, both in St. Louis. He said those companies also identify trends and report them to the authorities because it’s in their best interests.

“The revolution in health care is not health care, it’s in information,” he said. “And it’s the analysis of that data and information. That trend is just now coming into full effects on the enforcement side.”

Data increasing case complexity

The Department of Justice is able to focus on health care in addition to its other priorities such as violent crime by pooling its resources across the country, Jensen said.

Strike forces across the country contain expert assistant U.S. attorneys from the department’s criminal division fraud section who handle health care prosecutions, he added.

Schelp said the strike forces are bringing larger-than-ever cases because of big data. He pointed to one case in the presentation, which included 320 defendants.

In his practice, Schelp said, he’s seen large cases that start elsewhere — he gave the example of West Virginia — but may pick up defendants from St. Louis or out-state Missouri.

“Your client might be caught up in a strike-force case that is encompassed by enormous effort, but you might just see it as U.S.A. v. One Doctor,” he said, referring to teams within the Department of Justice focused on health care fraud. “It’s important to understand where you fit in.”

Schelp noted that often investigators with strike forces on the coasts are the first to see certain types of fraudulent schemes. Those schemes eventually filter into the Midwest, he said.

“With fraud, if something is working, it’s coming our way,” he said. “If you’re representing health care clients, that’s a good preview at least from the criminal side of what to expect.”