As the two biggest U.S. dialysis providers battle Medicare fraud charges in court, HHS said it would pursue criminal charges in some cases.

Federal investigators are preparing to employ new tactics for fighting Medicare fraud. In an interview with The Associated Press, Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department  said the agency is growing increasingly frustrated with repeat offenders.

“When you look at the history of health care enforcement, we’ve seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy,” said Morris.

The dialysis industry has its share of alleged offenders.

• A federal judge ruled that Fresenius Medical Care AG must pay $82.6 million, up from a previous ruling of $19.3 million, for the Medicare fraud committed by the Nashville-based Renal Care Group, which was acquired by Fresenius five years ago. The judgment was part of a whistleblower case that claimed Renal Care Group and Renal Care Group Supply Co. over billed Medicare between 1999 and 2005 for home support dialysis supplies.  Fresenius spokeswoman Jane Kramer told the The Tennessean that the company will appeal the ruling and ask that the case be remanded for a jury trial. "We are confident that, after a full jury trial with testimony and evidence, no liability will be imposed,” Kramer said.

• DaVita Inc. will soon face charges for overbilling Medicare for drug reimbursements, according to Law.com. A well-known law firm that specializes in whistleblower cases, Wilbanks & Bridges, filed a complaint against DaVita three and a half years ago in Georgia, but it was under seal until April 1, while the government investigated the claim.

• A few years ago, Gambro Healthcare had to pay more that $300 million for alleged kickbacks and billing fraud.

• And Amgen Inc. has had several cases filed against it for EPO kickbacks and fraud. 

The typical way of handling these cases is by settlement. In fact, most Medicare fraud cases do not traditionally even go to trial. But the feds seem to believe it is because of these lax penalties that Medicare fraud is so commonplace.  With some repeat offenders, the settlements might just be part of the price of doing business.

But now executives can face criminal charges for their role in fraud, or even for not stopping it if they were not directly involved in the fraud. They can also be banned from doing business with Medicare, the AP reported.

Of course, this is not the first attempt to tighten federal health care spending. The ESRD bundle was created, in part, to rein in extravagant drug costs for the dialysis industry. And it appears to be working.

Although criminal charges against executives involved in health care fraud might ultimately be hard to pursue, I hope it sends a clear message to those entrusted to provide care: Health care fraud is not only illegal, but it puts patients at risk at the expense of the American taxpayer, which ultimately hurts our entire health care system.