The U.S. Justice Department’s COVID-related health care fraud initiative continues at an aggressive pace. Recently, the Justice Department announced – in a single day – criminal charges against 138 defendants in 31 federal districts throughout the United States, alleging about $1.4 billion in losses. Among those charged are 42 doctors, nurses and other licensed medical professionals. For businesses that took advantage of the $2.2 trillion in federal pandemic aid programs, this latest enforcement action demonstrates that an audit or investigation may be inevitable.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, enacted in March 2020, provided emergency financial assistance in the form of forgivable loans to businesses to cover payroll and other specified expenses through the Paycheck Protection Program (“PPP”). It also included the Provider Relief Fund (“PRF”), which provided needed medical care to Americans suffering from COVID-19. From the onset of these programs, the federal government vowed to take measures to prevent recipients from fraudulently taking advantage of the CARES Act programs. The Justice Department has been focused on COVID-19 health care related fraud since the onset of the pandemic.
A combination of federal and state law enforcement agencies are working together to investigate and prosecute alleged COVID-19 related fraud, including the Department of Health and Human Services Office of Inspector General, the FBI, the Drug Enforcement Administration, the Health Care Fraud Unit of the Criminal Division’s Fraud Section, the Health Care Fraud and Appalachian Regional Prescription Opioid Strike Force and the U.S. Attorneys’ Offices throughout the country.
Recent criminal charges associated with the COVID-19 fraud prevention program include a variety of allegations relating to the submission of false claims. The defendants are alleged to have misused patient information to submit claims to Medicare for many forms of medically unnecessary testing and telemedicine fraud. Individual defendants are also alleged to have misused PRF monies for their own personal expenses, including for gambling at Las Vegas casinos and payments to a luxury car dealership.
In 11 judicial districts, charges have been filed against 43 defendants who allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment (“DME”), 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. DME companies, genetic testing laboratories and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes. Prosecutors allege they also submitted more than $1.1 billion in false and fraudulent claims to Medicare and other government health benefit programs. The proceeds of the scheme were allegedly spent on luxury items, including vehicles, yachts, and real estate. Criminal charges also included allegations that the defendants submitted fraudulent claims for tests and treatments for patients seeking treatment for drug and/or alcohol addiction through a national sober homes initiative program. Other medical professionals have been charged with over-prescribing millions of doses of opioids and other prescription narcotics and submitting false billings.
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