Technical Fraud: Rico Violations
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. Sec 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.