What Are the Penalties in UPIC Audits?

Referral to Law Enforcement Agencies

In the most serious cases of fraud, UPIC auditors refer the case to the DOJ or U.S. Attorney’s Office for prosecution or to the HHS OIG for further investigation.

The U.S. Attorney’s Office generally brings claims resulting from a UPIC Audit under the False Claims Act. Under The False Claims Act (18 U.S.C. § 287), the government must establish that the defendant: (1) made or presented a false, fictitious, or fraudulent claim to a department of the United States; (2) knew such claim was false, fictitious, or fraudulent; and (3) did so with the specific intent to violate the law or with a consciousness that what he was doing was wrong. Case law has revealed that specific intent to defraud is not required. When a UPIC auditor has a qualified reason to believe that a violation of the FCA has occurred, it may refer the case as such. Because of the extensive and intrusive nature of a UPIC Audit, the U.S. Attorney’s Office, and DOJ, take the UPIC’s recommendation very seriously.

Generally, FCA claims against providers are prosecuted by the Civil Division of the applicable jurisdiction of the U.S. Attorney’s Office. Therefore, the penalty after litigation is generally a monetary civil penalty, which has a statutory limit amount. For the most up-to-date information on the limits of the monetary penalty, providers should consult an attorney working in the field.

UPIC audits can lead to both civil and criminal penalties following further OIG investigation. These do not have the same limitations in the False Claims Act. Therefore, providers should consult an experienced healthcare attorney to ensure that any applied penalties are as limited as possible.

Referral to the Medicare Administrative Contractor for Recoupment of Overpayment

When a UPIC audit reveals overpayment without an indication of fraud, the case may be referred to the Medicare Administrative Contractor to recoup the overpayment directly from the provider. Although the amount of recoupment can be in the hundreds of thousands, or even millions, of dollars, it is a less severe penalty than referral to law enforcement agencies. After the demand for recoupment is made, providers have a chance to appeal the demand. The five-step appeals process can save providers a lot of money. Therefore, providers should consult an experienced healthcare attorney with a record of reducing the amount of recoupment.

Provider Education & Other Sanctions

Provider education or other discretionary sanctions are the least punitive and best possible outcome of a UPIC Audit for the provider. This outcome means that the provider will not be assessed an overpayment demand or other potential sanction that might be determined by the government after UPIC auditors choose to refer a case to the government for further investigation. Providers should heed the advice of educators and make all changes that are recommended to maintain compliance and avoid future audits and investigations.

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Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Lynette S. Byrd

Former Assistant U.S. Attorney

Partner

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Thousands of UPIC audit requests are made every year. Oberheiden P.C. has extensive experience advising and counseling clients during the UPIC audit process. The Firm also has an impeccable record when achieving favorable outcomes in UPIC audits and avoiding referral to the Department of Justice for further investigation or prosecution. The experience of our attorneys, many of which served the Department of Justice until recently as supervising healthcare fraud prosecutors, covers all aspects of healthcare compliance as well as effective defense strategies. Because we know what type of information the government is looking for, we can prepare our clients to avoid common mistakes.

Our team has successfully defended business owners, healthcare executives, and medical professionals through UPIC audits and other cases involving the Federal Bureau of Investigation (FBI), the Medicaid Fraud Control Unit (MFCU), the Office of Inspector General (OIG), the Department of Justice (DOJ), the Department of Defense (DOD), the Internal Revenue Service (IRS), and other law enforcement agencies.

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