On September 17, 2021, the U.S. Department of Justice announced the execution of another nationwide enforcement action targeting healthcare fraud. The enforcement action marks the second year that the DOJ has announced a nationwide takedown. Last year, CG attorneys discussed the DOJ’s nationwide enforcement action involving 345 defendants allegedly responsible for submitting more than $6 billion in fraudulent healthcare claims, involving telemedicine fraud, sober home fraud, opioid schemes, and traditional healthcare fraud schemes.
In the DOJ’s latest takedown, the government levied criminal charges against 138 defendants, which included 42 doctors, nurses, and other licensed medical professionals. According to the press release, the 2021 takedown targeted the same types of fraud as the 2020 takedown: telemedicine fraud, fraud regarding substance abuse treatment facilities (sober homes), illegal opioid distribution schemes, and traditional healthcare fraud. This 2021 takedown included an added, but unsurprising, fraud category – COVID-19 related schemes. The press release notes that the schemes resulted in approximately $1.4 billion in alleged losses.
Telemedicine fraud cases involved in the 2021 takedown amounted to over $1.1 billion in allegedly false and fraudulent claims. The claims were allegedly submitted by over 43 criminal defendants in 11 judicial districts. According to the government, certain telemedicine executives paid medical providers to order unnecessary durable medical equipment, diagnostic testing, pain medications, and other services based on limited or no interaction with patients that the providers never met. DME companies, genetic testing laboratories, and pharmacies then purchased those orders and submitted over $1.1 billion in false and fraudulent claims to the government.
COVID-19 Fraud Cases
The COVID-19 fraud cases involved fourteen defendants. Nine defendants are accused of engaging in schemes to exploit the COVID-19 pandemic. In one scheme, the defendants exploited CMS’ expanded telehealth regulations, which CG attorneys previously discussed. According to the government, the defendants misused patient information to submit claims to Medicare for medically unnecessary services. Five defendants are accused of misusing the Provider Relief Fund, which reimburses eligible providers for healthcare-related expenses and lost revenue due to COVID-19. According to the government, the five defendants allegedly used money from the Provider Relief Fund for personal expenses, gambling, and luxury purchases. The COVID-19 schemes resulted in the submission of over $29 million in false billings.
Substance Abuse Treatment Facility Fraud
The fraud cases related to substance abuse treatment facilities (“sober homes”) involved alleged kickbacks and bribery schemes related to referrals of patients seeking treatment for drug and/or alcohol addiction. These patients could also be subject to medically unnecessary services, according to the government. The sober home scheme also involved claims billed to the government for services not rendered, not medically necessary, or that were excessively expensive. These improper billings allegedly resulted in the submission of millions of dollars of false or fraudulent claims to private insurers.
According to the press release, the 2021 takedown of sober home fraud cases was announced on the first anniversary of the first-ever national sober homes takedown. The first nationwide sober home takedown resulted in charges against more than a dozen defendants for claims that amounted to more than $845 million, according to the DOJ.
Opioid Schemes & Traditional Healthcare Fraud
As part of the nationwide takedown, 19 defendants were charged for their roles in illegal opioid schemes, which included the distribution of over 12 million doses of opioids and prescription narcotics. The schemes also involved over $14 million in false billings, according to the government. More than 60 defendants were charged for their roles in traditional healthcare fraud schemes to submit over $145 million in false or fraudulent claims to government and private payors. The claims submitted were for services either medically unnecessary or never provided.
Chilivis Grubman attorneys have discussed the government’s willingness to collaborate with various agencies to bolster its enforcement capabilities – this 2021 takedown is more of the same. The takedown was led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid Strike Force program. Thirty-one U.S. Attorneys’ Offices, the FBI, the Department of Health and Human Services Office of Inspector General (HHS-OIG), the DEA, and other federal and state law enforcement agencies aided in the nationwide takedown.
The Health Care Fraud Strike Force keeps 15 strike forces in 24 districts. According to the press release, the Health Care Fraud Strike Force has charged over 4,600 defendants who allegedly billed Medicare for $23 billion. Businesses and individuals should note the government’s efforts and heed the government’s warnings. According to Deputy Inspector General for Investigations Gary L. Cantrell of HHS-OIG, “[t]oday’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 health care programs.”
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, both criminal and civil, and False Claims Act litigation. If you need assistance with such a matter, please contact us today.