DOJ announces charges in $1.4 billion healthcare fraud sweep

September 30, 2021
by Robin Lasky, Contributing Reporter
The DOJ has announced charges against 138 defendants in a healthcare fraud enforcement sweep spanning 31 federal judicial districts and involving a purported $1.4 billion in losses.

The charges are the result of an interagency operation to crack down on a range of different fraudulent healthcare schemes occurring nationwide. Specifically, according to a DOJ statement, the charges cover fraudulent telehealth schemes, fraud that exploited pandemic related changes to healthcare policies, rules, and regulations; fraud involving sober living homes, illegal prescribing, and distribution of opioids, as well as other forms of fraudulent Medicare and insurance billing.

“The charges announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a continued pandemic,” stated assistant attorney general Kenneth A. Polite.

Out of the alleged $1.4 billion in losses, $1.1 billion was related to telehealth alone. And yet, only 43 of the 138 defendants charged were involved in those cases, suggesting that telehealth fraud may be the most lucrative — if not the most pervasive — avenue for healthcare schemes.

Telemedicine fraud has become increasingly common in the pandemic era as individuals seek to capitalize on the suspension of certain rules and regulations relating to its governance. Earlier this month, a Florida resident pleaded guilty in connection with a $73 million conspiracy that involved promising illegal kickbacks in exchange for Medicare beneficiary information, which was then used by a telehealth company to refer new patients and bill Medicare for medically unnecessary genetic testing.

In August, two nurses were sentenced to prison for signing prescriptions for orthopedic braces submitted by a telehealth company without having examined or consulted with the Medicare beneficiary patients. This case was also the product of a large-scale DOJ enforcement action which resulted in identifying over $6 billion in fraudulent Medicare claims, according to investigators.

In February, the law firm Bass, Barry, and Sims, a commercial law firm representing businesses in the industry, issued its annual Healthcare Fraud and Abuse Review warning that 2021 would likely see the healthcare industry under increased scrutiny by regulators due to billions of dollars in COVID-19-related relief flowing into the healthcare industry, and to expect more large scale, consolidated law enforcement actions of this kind.

“The Review details how such a scenario presents an enforcement 'perfect storm' for the healthcare industry as a result of the distribution of large amounts of fast cash within a highly regulated industry, along with poor and evolving government guidance, and assured retrospective scrutiny by the regulators,” the firm stated at the time.