FEATURE — Summer 2009


Stemming Health-Care Fraud

( Photo: Andrew Cutraro)

Although prosecution deters crime, alumnus Kirk Ogrosky says the solution to health-care fraud lies with health-care professionals and consumers.

By Rick Skwiot

In late 2006, Kirk Ogrosky found Miami per-patient Medicare expenditures 20 to 30 times the national average for certain services. Because there was no plausible medical explanation, he thought it a good place to begin work.

Ogrosky, A.B. ’92, had just been named the head of the Criminal Division’s health-care fraud enforcement efforts at the U.S. Department of Justice (DOJ). With the help of the FBI and a medical data analyst, he was looking for Medicare spending anomalies. Miami was one of “three regions that jumped off the page as being out of whack,” says Ogrosky. The others were Los Angeles and Houston.

Within a year, Ogrosky’s Medicare Strike Force had indicted 120 Miami defendants for committing some $420 million in fraud, and ultimately it won more than 99 percent of its cases. He now coordinates DOJ’s efforts in 94 districts across the land intent on finding and prosecuting health-care-related fraud—“in Medicare and private insurance, fraud against physicians, pharmaceutical pricing, hospital chains, and all kinds of public and private payers,” says Ogrosky. That includes National Institutes of Health academic medical-center pharmaceutical studies and state-administered Medicaid programs.

Despite the high prosecution success-rate and extent of health-care fraud and waste—estimated at 10 percent of expenditures, or some $200 billion annually, with $2 billion of that in Miami alone—Ogrosky says prosecution isn’t the ultimate answer to stemming it.

“We can’t prosecute our way out of health-care fraud. We’ll end up with more government and tighter regulations if the health-care community itself doesn’t solve the problem,” says Ogrosky.

“Prosecution is a drain on resources,” says Ogrosky, who has been interviewed on NBC Nightly News, NPR, and Fox about health-care fraud deterrence. “This isn’t sport—the government doesn’t want to put people in jail. We’re trying to deter crime.”

Although perhaps not the final answer to eliminating health-care fraud, prosecution does seem to work as a deterrent. During DOJ’s Strike Force prosecutions in Miami, Medicare billing there dropped by $1.7 billion.

A role for medical pros and patients
The solution to health-care fraud lies with health-care professionals and consumers, says Ogrosky. “We need all people to step up and say this is not right, to help us put an end to it”—particularly important now, he says, “with a finite amount of resources and looking at a doubling of health-care expenditures by 2015.”

A View from the Front Lines in the Health-Care Fraud Fight
In 2007, Kirk Ogrosky recruited Jon Baum, J.D. ’99, to the health-care fraud unit. A federal prosecutor, Baum formerly handled fraud cases in the Eastern District of Virginia. He also previously worked for the Electronic Surveillance Unit at the Department of Justice reviewing wiretap warrants. Within days of his recruitment, Baum was assigned to lead a Strike Force team in Los Angeles. He commented for Washington University in St. Louis Magazine on Ogrosky and his methods in fighting health-care fraud.

“During my first year working with Kirk, I saw firsthand how our method was both inventive and effective,” says Baum. “Kirk is a true believer in making the health-care system better and is willing to push agencies to challenge how they think about their policies and to make effective changes.”

According to Baum, Ogrosky teaches young prosecutors by “throwing them in and letting them work.” Baum says, “As a manager, Kirk leads by example: first, by handling his own cases, and second, by working with us in interviewing witnesses and guiding us in how to bring the best cases.”

Regarding the staggering workload, Baum says, “Our health-care fraud prosecutors expect to work 24 hours, seven days a week, and that is why our small unit tried almost 20 percent of all health-care fraud cases in the country last year.”

A vital key to fighting fraud lies in the physician–patient relationship, says Ogrosky. “By protecting that relationship, Medicare has been a trust-based system, based on trusting medical professionals and doctors to be gatekeepers.” But patients need to pitch in as well, he says. “There’s a big role for patient responsibility. Patients need to look at the explanation of benefits on their bill and call the 800 number” listed there when they find a discrepancy or have questions about charges.

Dishonest patients are a big part of the problem in health-care fraud, says Ogrosky, “often complicit, taking money to participate in a scheme.”

In Miami, for example, patients received kickbacks for treatment, drugs, and medical equipment they never received. Others sold their Medicare numbers to owners of pharmacies and medical equipment companies, which then billed Medicare for products never delivered.

“Fraud is most common,” says Ogrosky, “where there are low barriers for entry into the health-care system, without getting a license. In durable medical equipment (DME) companies, for example, people don’t even need a high school diploma.”

Like some physical maladies, health-care fraud is often “very viral,” says Ogrosky. “We see schemes develop and grow in communities. For example, infusion drugs to treat HIV are very expensive and rare. We saw very little Medicare billing for infusion drugs prior to 2001, but since then we have paid more than $5 billion for them in Miami alone.”

In Miami, he noticed that with some clinics all infusion patients were getting the same mix and quantity, “whether they weighed 120 pounds or 220 pounds. That didn’t make sense.” That, coupled with the fact that the level of drugs coincided with the maximum Medicare would pay for, led to further prosecutions.

A history of health-care focus
Ogrosky’s interest in health care extends back to his undergraduate days at Washington University, where he majored in economics and psychology.

“I always liked health-care policy,” says Ogrosky, a native of Harrodsburg, Kentucky. “My senior economics paper was on drug markets for unapproved pharmaceuticals, and I took all the classes I could in health care.”

He also was encouraged by his University friends and colleagues. “Half my close friends at the University would become doctors—they influenced me a lot.”

He claims that his experience at the University matured and motivated him.

“I have a real affinity for Washington University. I grew up within that community, and I have a lot of personal gratitude for it,” says Ogrosky. “I’ve been involved with it ever since, too, and find it interesting how many Washington U. people I run into in my work.”

Ogrosky attended the George Washington University School of Law, earning his J.D. in 1995. He then returned to Kentucky, serving two years as an assistant attorney general, handling cases involving Medicaid administration, reimbursement, and certification, and representing the state Department of Insurance and Health Purchasing Alliance in health-insurance litigation.

After a year’s federal judicial clerkship in Miami, he joined the U.S. Attorney’s Office there as an assistant U.S. attorney, handling health-care fraud, tax evasion, and narcotics cases. In one case alone, a 22-week health-care fraud trial, he convicted physicians, pharmacists, and DME company owners.

In 2004, he joined the law firm of Skadden, Arps, Slate, Meagher & Flom LLP. As counsel at the firm, Ogrosky helped establish a health-care fraud and abuse practice, representing corporate clients, including hospitals, pharmaceutical companies, and physicians, in health-care fraud matters.

Since being recruited back to the Department of Justice in 2006, Ogrosky has received the Attorney General’s Award for Distinguished Service in 2008 and the Assistant Attorney General’s Award for Special Initiative in 2007 for his work fighting health-care fraud.

Rick Skwiot is a freelance writer who divides his time between St. Louis and Key West, Florida.