For several years, the U.S. Department of Justice has announced a large nationwide enforcement action or take down involving alleged health care fraud.  These enforcement actions often involve coordination between federal, state, and local government agencies across the nation and result in several arrests.  In 2019, Chilivis Grubman attorneys discussed the Appalachia Opioid Takedown that resulted in sixty people in seven states throughout Appalachia being criminally charged for allegations related to the prescription and distribution of opioids and other controlled substances.  In 2020, CG attorneys discussed the record-breaking takedown involving 345 defendants and $6 billion in alleged fraud losses.  Coordinated enforcement actions continue to crack down on billion-dollar schemes – as evidenced by the DOJ’s most recent announcement. 

On July 20, 2022, the DOJ announced a nationwide enforcement action that resulted in 36 defendants being criminally charged for their involvement in various healthcare-related fraud schemes valued at more than $1.2 billion.  The charges arose out of 13 federal districts across the nation and included company owners and executives.  The DOJ announcement also noted that government agencies (CMS and Center for Program Integrity) took adverse administrative actions against 52 providers involved in similar schemes.

The alleged schemes involved areas in the healthcare industry that have faced increased scrutiny by the government: telemedicine, genetic testing, and durable medical equipment.  Specifically, the government noted that it “primarily targeted alleged schemes involving the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies.”  The government explained that some telemarketing networks controlled by some defendants were (based domestically and abroad) allegedly used deceptive tactics to lure elderly and/or disabled patients into the scheme.  The scheme arranged for providers to order expensive tests and DME often based on little-to-no patient interaction, based on the press release.


1. Coordinated Enforcement Actions. The federal government continues to demonstrate that it is willing and able to coordinate with other federal, state, and local agencies to enforce the nation’s laws.  Providers must continue efforts to comply with rules and laws at every level.  The enforcement of fraud, waste, and abuse laws is not a siloed event and providers should assume that every agency is communicating with every agency.


2. Corporate Veil.  While legal minds understand that a corporate entity cannot shield an owner and execute from criminal charges, many individuals still make this improper assumption.  Fortunately, the publication of executives and company owners being criminally charged appears to be increasing.  Compliance champions should acknowledge this point and use the increased publicity to obtain buy-in from corporate executives, owners, and providers for compliance purposes.


3. Consequential Administrative Actions.  The DOJ highlighted the criminal charges and the dollar value of the schemes.  It briefly mentioned that 52 providers faced administrative actions.  It should be noted that administrative actions are significant and often include overpayment determinations, suspension, revocation, or exclusion from Medicaid or Medicare.  Sometimes, administrative actions can be comparable to “nuclear verdicts” with an extraordinarily difficult administrative appeal process (when available) and consequences providers rarely expect.  These consequences may include reporting to several agencies and companies, loss of privileges at medical institutions, exclusion from private payor networks, Board investigations, etc.  Adverse administrative actions should be taken seriously.


4. Telemedicine.  Since the beginning of the COVID-19 pandemic, telemedicine and telehealth services have skyrocketed. While telehealth and telemedicine provide exciting and convenient opportunities for the provision of medical care, it is fraught with fraud-and-abuse-related peril.  Healthcare providers who avail themselves of the opportunities that telehealth and telemedicine provide must remain vigilant with potential fraud and abuse concerns.  Healthcare providers should also ensure compliance with Board rules where they are licensed, where they are practicing, and where their patients are located.  Providers should ensure compliance with documentation requirements and other compliance-related rules at the local, state, and federal levels.  Compliance failures can result in severe administrative consequences in addition to fraud, waste, and abuse enforcement actions.

There is an increasing trend of large-scale takedowns by the DOJ.  Many of these schemes are elaborate and ensnare unsuspecting providers and patients.  Providers and healthcare companies should take substantive steps in compliance, obtain buy-in from employees and contractors at all levels, and be wary of opportunities that seem too good to be true.  The consequences of non-compliance and/or fraud, waste, and abuse culpability can be life-altering. And defending against enforcement actions is complex, multifaceted, and often requires expending significate resources.

The attorneys at Chilivis Grubman represent healthcare clients of all types and sizes in connection with enforcement actions, litigation, government investigations (both criminal and civil), and regulatory matters, including matters involving the DOJ and HHS-OIG.  If you need assistance with such a matter, please contact us today.