The Medicare fraud and abuse law is not the only restriction on physician
business practices. The greatest threat is that physicians will violate the
federal RICO. Losing defendants in a RICO action are subject to treble
damages: the payment of the plaintiff’s attorney’s fees, confiscation of their
assets, and incarceration. The implications of these potential damages are
illustrated in the medical care RICO case that resulted in a judgment for $100
million. [BNA. Court approves settlement in physicians’ suit against HMO.
Reg Law Rep. February 24, 1989; 21:313.] As with the Medicare fraud and
abuse provisions, physicians may commit RICO violations without engaging in
what is traditionally thought of as illegal activities.
It is controversial to discuss routine medical practices as potential RICO
violations. As with the fraud and abuse laws, there have been few RICO
lawsuits or prosecutions against physicians. This lack of litigation, combined
with a belief that RICO applies only to criminals, has led most lawyers to reject
RICO as a problem for physicians and medical care businesses. Few physicians
have been counseled about the risks of RICO yet, but many unknowingly
engage in practices that could subject them to RICO liability. Understanding
how this might happen requires an understanding of the RICO law.