On September 17, 2021, the Department of Justice announced criminal charges against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various healthcare fraud schemes that resulted in approximately $1.4 billion in alleged losses.
The charges target approximately $1.1 billion in fraud committed using telemedicine (the use of telecommunications technology to provide healthcare services remotely), $29 million in COVID-19 healthcare fraud, $133 million connected to substance abuse treatment facilities or “sober homes,” and $160 million connected to other healthcare fraud and illegal opioid distribution schemes across the country.
The cases include:
Telemedicine Fraud Cases
Over $1.1 billion in allegedly false and fraudulent claims submitted by more than 43 criminal defendants in 11 judicial districts relate to schemes involving telemedicine. According to court documents, certain defendant telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. Durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted over $1.1 billion in false and fraudulent claims to Medicare and other government insurers. In some instances, medical professionals billed Medicare for sham telehealth consultations that did not occur as represented. The proceeds of the scheme were spent on luxury items, including vehicles, yachts, and real estate.
COVID-19 Fraud Cases
Nine defendants in the cases are alleged to have engaged in various healthcare fraud schemes designed to exploit the COVID-19 pandemic, which resulted in the submission of over $29 million in false billings. In one type of scheme, defendants are alleged to have exploited policies that were put in place by CMS to enable increased access to care during the COVID-19 pandemic, such as expanded telehealth regulations and rules. Defendants allegedly misused patient information to submit claims to Medicare for unrelated, medically unnecessary, and expensive laboratory tests, including cancer genetic testing.
The law enforcement action also includes criminal charges against five defendants who allegedly engaged in the misuse of Provider Relief Fund monies. The Provider Relief Fund is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 designed to provide needed medical care to Americans suffering from COVID-19. The defendants allegedly used the moneys for their own personal expenses, including for gambling at a Las Vegas casino and paying a luxury car dealership.
Cases Involving the Illegal Prescription and/or Distribution of Opioids and Cases Involving Traditional Healthcare Fraud Schemes
Cases involving the illegal prescription and/or distribution of opioids involve 19 defendants, including several charges against medical professionals and others who prescribed over 12 million doses of opioids and other prescription narcotics, while submitting over $14 million in false billings. The cases that fall into more traditional categories of healthcare fraud include charges against over 60 defendants who allegedly participated in schemes to submit more than $145 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided.
Deputy Inspector General for Investigations Gary L. Cantrell of Health and Human Services-Office of Inspector General stated,” We have seen all too often criminals who engage in healthcare fraud — stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries. Today’s announcement should serve as another warning to individuals who may be considering engaging in such illicit activity: our agency and its law enforcement partners remain unrelenting in our commitment to rooting out fraud, holding bad actors accountable, and protecting the millions of beneficiaries who rely on federal healthcare programs.”
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The link to view Assistant Attorney General Polite’s remarks can be accessed here.
Compliance Perspective
Issue
It is extremely important that all members of the healthcare team are aware of what may be considered a false claim or a kickback. Ensure that all staff are aware that these violations can occur whether they are intentional or unintentional. Failure to promptly report a false claim or kickback can result in lawsuits, fines, and other sanctions. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1 Compliance and Ethics Program, CP 2.3 General Legal Duties and Antitrust Laws.
Discussion Points
- Review policies and procedures for preventing and reporting a false claim or anti-kickback statute violation. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect a false claim or illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
FOR MORE INFORMATION ON THIS TOPIC VIEW: FRAUD MODULE 3 – MASTERING LEGAL IMPLICATIONS AND ANTITRUST LAWS.
