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Criminal Liability for Health Care Organizations in Ohio

By Laura A. Perkovic

Both organizations and individuals can be held liable for crimes in Ohio. This is especially relevant in the area of health care law, where physician groups operate under entities such as Corporations, Professional Associations, or Limited Liability Companies. This article will explain organizational liability (often loosely referred to as corporate liability) and prosecution of organizations (loosely referred to as corporate prosecutions) for health care related offenses in Ohio, including what corporate prosecution could mean for business owners.

I have seen corporate or business prosecutions arise in many scenarios, including:

  • Long term care facilities charged with abuse/neglect where previous concerns for patient safety have gone unaddressed;
  • Medical practices charged when an owner or practice manager up-codes for higher reimbursement;
  • Home health agencies charged when its employees falsified services;
  • Transportation companies charged for embellishing mileage, or when its employees falsified services.

How can a health care entity or organization be charged with a crime?

R.C. 2901.23 governs criminal liability of organizations. In the context of health care law and state-level prosecutions, the most pertinent provision of this statute allows for a business to be convicted of a crime if:

  • High managerial officers, agents or employees;
  • Authorize, request, command, tolerate, or perform the offense;
  • And in doing so, act with the same intent required to commit the offense (e.g. act with purpose to commit fraud).

Keep in mind that if any individual acts with the intent required to commit the crime (e.g. act with purpose to commit fraud), they will likely face individual criminal charges as well.

Impact on un-charged owners?

There is a powerful domino effect that happens upon the conviction of a company in the business of health care. The fallout affects those owners and managers neither charged nor convicted. Two main consequences of corporate prosecution and conviction are:

  • Termination of entity provider status
  • OIG and state exclusion

Once an organization is convicted of a health care program-related crime such as Medicaid or Medicare fraud, it will effectively be out of business. Pursuant to Ohio law, the Ohio Department of Medicaid (ODM) will terminate a provider agreement if the provider entity has been convicted of, or pled guilty to, any criminal activity materially related to either the Medicare or Medicaid programs. Ohio Medicaid can also exclude the entity from further participation in the Medicaid program.

Under Federal law, the entity will be excluded for a period of 5 years upon first conviction for a program-related crime. Individuals with ownership or control interests in an excluded entity who know or “should know” of the action constituting the basis for exclusion may be likewise excluded from participation in federally funded health care programs.

Our Attorneys

Chapman Law Group is a firm focused exclusively on the needs of health care professionals. As a former health care fraud prosecutor, Attorney Laura Perkovic she has extensive experience in health care-related crimes and now focuses her practice on helping doctors, nurses and other health care professionals in individual and corporate prosecutions, government investigations, and navigating the minefield of federal and state regulations. Chapman Law Group handles cases in many courts throughout the nation. It is wise to consult with an experienced legal team as soon as government investigators make contact with you or your business, in order to understand your rights, obligations, and exposure.