The Justice Department has continued to intensify its investigative efforts to combat fraud draining billions of dollars from the United States health care system annually. On Thursday, Attorney General Merrick Garland announced charges against 193 people for their roles in various healthcare fraud schemes in 32 different federal districts. The DOJ healthcare fraud probe led numerous law enforcement agencies on a two-week long sweep resulting in the seizure of more than $231 million in cash, luxury vehicles, gold, and other assets. The defendants were accused of conducting a variety of schemes that involved millions of dollars in fraudulent claims, wire fraud, health care fraud, and money laundering. Attorney Garland stated that the Justice Department seeks to “bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”

Included in this DOJ sweep was the recent arrest of CEO and clinical president of Done Global telehealth company. On Thursday, Garland announced five additional defendants were charged for their alleged participation in the $40 million scheme to illegally distribute medically unnecessary Adderall and other medicines. This case is discussed in further detail in our previous post. 

Five cases were filed in Arizona, including a $900 million scam allegedly targeting elderly and terminally ill patients. Two owners of several wound care companies were charged with conspiracy, healthcare fraud, receiving kickbacks, and money laundering. The individuals, along with two nurse practitioners, allegedly submitted fraudulent claims for amniotic wound grafts on elderly Medicare patients, many of whom were terminally ill in hospice care. The DOJ stated that defendants “caused unnecessary and extremely expensive amniotic grafts to be applied to these vulnerable patients’ wounds indiscriminately, without coordination with the patients’ treating physicians, without proper treatment for infection, to superficial wounds that did not need this treatment, and in sizes excessively larger than the wound[.]” The owners allegedly pressured nurse practitioners to apply the amniotic grafts on patients who reportedly died the same day, or within a few days after the application. The DOJ reports that the owners received over $330 million in illegal kickbacks in exchange for buying grafts that were billed to Medicare, and federal authorities seized over $70 million, including four luxury vehicles, gold, jewelry, and cash. The DOJ states that Medicare has paid more than $1 million per patient due to the unnecessary grafts, totaling over $600 million in 16 months.

In Florida, three owners of a wholesale pharmaceutical company were charged in connection to their alleged $90 million wire fraud scheme distributing adulterated and misbranded HIV drugs. Defendants allegedly bought heavily discounted and diverted prescription drugs from black market suppliers, then resold the drugs to pharmacies across the country with false documentation concealing its original source. Garland reported that this resulted in patients receiving bottles labeled as their prescription medication but actually containing an entirely different drug. “One patient passed out and was unconscious for 24 hours after taking an anti-psychotic that he believed was his prescribed HIV medication.”

In Florida and Arizona four people were charged for allegedly filing $146 million in false and fraudulent claims for patients who were seeking treatment for drug or alcohol addiction. In one indictment, the owner of an outpatient treatment facility enrolled in Arizona’s Medicaid agency  was charged with allegedly paying kickbacks in exchange for the referral of vulnerable patients who were from the homeless population and Native American reservations. The defendant is charged with  fraudulently billing Arizona’s Medicaid for substance abuse treatment services that, according to the DOJ, “were either never provided or were provided at a level that was so substandard that it failed to serve any treatment purpose.”

The repercussions of health care fraud extend beyond financial losses. Patients may receive unnecessary treatments or medications, leading to potential harm or even death.  With increasing scrutiny of the Justice Department, and patients’ decreasing trust in the medical profession, providers found guilty of fraudulent activities make it difficult for legitimate health care providers to safeguard against accusations of wrongdoing. Efforts to strengthen health care policy and regulation will be critical in protecting the integrity of the health care system and it will require collaboration between stakeholders.