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The Risks of Business as Usual

There is a significant question as to the ethics of continuing to participate in a prohibited activity. A low probability of being prosecuted is not an adequate excuse for breaking the law. While it may be ethically defensible to engage in civil disobedience to protest a law, this should be done with an acceptance of the consequences of the action. It also is hard to assert that actions taken in private, with substantial financial benefits, are civil disobedience rather than merely seeking to profit from illegal activities.

It is ethically defensible to continue a practice that is beneficial and not clearly prohibited by the law. The promulgation of the final safe harbor regulations limits the availability of this ambiguity defense. These regulations and the accompanying fraud alerts also limit the extent that a physician may rely on the advice of counsel as to the acceptability of a regulated activity. Reliance on the advice of counsel is not a defense to criminal activity. At best, it can be used to show that the defendant did not intentionally break the law. This does not excuse breaking the law, but it may persuade the judge to impose a reduced sentence. Ultimately each individual is responsible for knowing and obeying the law. Physicians cannot insulate themselves from liability by selecting counsel who will claim the practice is not prohibited.

Ethical questions aside, an analysis of the severity and probability of the risk of prosecution weighs against continuing to participate in prohibited activities. While in the past there have been few criminal prosecutions, physicians have gone to jail under this law. In other cases, physicians have avoided criminal prosecution by paying substantial fines to the OIG. In one settlement, the physician agreed to pay $875,000.[43] Fighting the claim can be devastating. A dentist who rejected the chance to settle a case for a small amount was assessed a penalty in excess of $18 million in the trial of the case.[44]

Fraud and abuse settlements and court-imposed fines are not insurable; these must be paid out of the physician's own funds. Accused physicians also must pay for legal representation. This can be several thousand dollars for a simple negotiated settlement or tens of thousands of dollars to defend a criminal prosecution against a single physician. A criminal prosecution generates substantial adverse publicity and can take the physician away from practice for weeks during a trial.

[43]Burda D: AHM to pay $500,000 to settle dispute. Mod Healthcare 1991a Apr 8:32.

[44]Burda D: Watchdog gets tough on Medicare fraud; Inspector general has strong-armed nearly $10 million in hospital settlements. Mod Healthcare 1991b Apr 8:32.

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