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Catch of the Week: National Health Care Fraud Sweep

Posted  June 30, 2023

This week’s Department of Justice (DOJ) Catch of the Week goes to the 78 individuals criminally charged with participating in health care fraud and opioid abuse schemes across the country.  On Wednesday, DOJ announced the “strategically coordinated, two-week nationwide law enforcement action” it brought with federal and state law enforcement partners, which targeted misconduct resulting in over $2.5 billion in alleged fraud.

According to the government, the defendants allegedly defrauded programs designed to care for the elderly and disabled and used their illicit proceeds to purchase luxury items like fancy cars, expensive jewelry, and yachts.  In connection with the nationwide sweep, DOJ seized millions of dollars in cash, automobiles, and real estate.

DOJ identified telemedicine fraud, pharmaceutical fraud, and opioid distribution as three of the key areas of wrongdoing.

Telemedicine Fraud

DOJ charged 11 individuals with submitting over $2 billion in fraudulent claims from various telemedicine schemes.  DOJ highlighted three of them:

  • DOJ charged executives of a company selling templated doctors’ orders for orthotic braces and pain creams allegedly in exchange for kickbacks and bribes. The government claims the scheme resulted in close to $2 billion in false claims to Medicare and other government insurers for orthotic braces, prescription skin creams, and other items that were medically unnecessary and ineligible for Medicare reimbursement.
  • DOJ charged various individuals participating in a telemarketing operation targeting the elderly and disabled with direct mail, television ads, and other forms of advertising to induce them to purchase unnecessary medical equipment and prescriptions. The scheme allegedly involved illegal kickbacks and bribes to telemedicine companies to obtain doctors’ orders so Medicare would cover these medically unnecessary purchases.
  • DOJ charged a physician for signing more than 2,800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. The physician allegedly took less than 40 seconds to review and sign each order.

Pharmaceutical Fraud

DOJ charged 10 individuals with submitting over $370 million in fraudulent claims to Medicare for prescription drugs.  One of the cases involved a pharmaceutical wholesale distribution company that allegedly paid HIV patients for their expensive HIV medication and repackaged those pills for resale, using falsified labeling to conceal the scheme.  Pharmacies then purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs.  At least one individual already has been sentenced to 15 years in prison for his role in this nationwide scheme, which according to court documents, resulted in the sale of the wrong medication and broken pills.

Opioid Distribution

DOJ charged 24 individuals for providing patients with opioids they did not need.  In DOJ’s press release announcing the enforcement action, Drug Enforcement Administration Administrator Anne Milgram stressed the agency’s commitment to protecting the health and safety of all Americans by clamping down on illegal opioid distribution:

When individuals divert addictive opioid medications for personal gain, they are knowingly putting Americans at risk, all too often causing harm and even death. DEA is committed to taking decisive action to hold accountable anyone who participates in these dangerous schemes.

Milgram’s sentiment was echoed by the other agencies involved in the coordinated sweep, which according to Attorney General Merrick Garland involved one of the largest health care fraud schemes ever prosecuted by the DOJ.  The head of DOJ’s Criminal Division Kenneth A. Polite noted the enforcement action included some of the largest and most complex cases DOJ has ever prosecuted, and “demonstrates the Department’s commitment to seeking justice for those at all levels of the healthcare industry who put profits above patient care, from professionals in doctors’ offices to executives in corporate boardrooms.”

While there is no indication any whistleblowers were involved in this targeted enforcement roundup, whistleblowers historically have played a critical role in the government’s fraud enforcement regime, especially when it comes to healthcare fraud.  Through the False Claims Act, individuals are allowed to bring lawsuits on behalf of the government against those that commit fraud against the government.  Over the past two decades, the government has recovered tens of billions of dollars under the statute, largely through actions initiated by whistleblowers.  Many have involved telehealth fraud and pharmaceutical fraud similar to what DOJ went after with its latest coordinated enforcement action.

The False Claims Act also provides that whistleblowers may receive up to 30 percent of any government recovery.  This has resulted in whistleblowers receiving hundreds of millions of dollars over the past twenty-five years from lawsuits they initiated against fraudsters.  The majority of those actions have involved healthcare fraud schemes targeting Medicare and Medicaid.

If you would like more information on what it means to be a whistleblower or think you may have information relating to healthcare fraud or any other kind of fraud against the government, please feel free to contact us so we can connect you with a member of the Constantine Cannon whistleblower lawyer team.

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Tagged in: FCA Federal, Healthcare Fraud, Lack of Medical Necessity, Medicare, Pharma Fraud, Provider Fraud,