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Not just for the mafia: Racketeering in medicine

The Racketeer Influenced and Corrupt Organizations (RICO) Act is a federal law that triggers visions of the mafia and other forms of organized crime. Although this law is likely most popular for those types of cases, it can play a role in health care law. Individuals or the government may use RICO charges against those who use legitimate enterprises to engage in criminal activity.

What exactly is racketeering?

As noted above, the crime essentially involves using a legitimate business to conduct illegal activity. This can include purchasing the business with ill-gotten gains, operating a legitimate business with money from illegal enterprises or using the business to commit illegal acts. Common examples of illegal activity often tied to racketeering charges include bribery, gambling and money laundering.

How do medicine and racketeering intersect?

In a recent example, a group of physicians have accused an insurance company of RICO violations. The physicians have filed a lawsuit against the insurance company for two claims:

· Breach of contract. The physicians state the insurance company breached its contract by failing to pay the agreed upon rate for claims.

· RICO violations. They also state the group worked with a third-party to develop an illegal scheme to reduce payment rates to the physician group. The group states the insurance company is trying to "strong-arm" physicians through this relationship and is undermining the patient/doctor relationship.

The case is not yet resolved. If the physician group can substantiate their claims, the relationship between the insurance company and third-party group could satisfy the elements needed to establish the presence of illegal racketeering.

Why should doctors care?

Although racketeering charges may be unusual, it is an important example of the range of charges that doctors can face or use as a legal tool in the event that they themselves believe they are a victim of similar abuse.

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