DOJ Crackdown Nets Hundreds of Healthcare Fraud Suspects

While there are many benefits to telemedicine, federal investigators also are finding it’s ripe for fraud. And we may only be seeing the tip of the iceberg as evidenced by the most recent national fraud enforcement action resulting in charges involving more than $1 billion in losses.

Earlier this month, the U.S. Department of Justice announced that criminal charges had been filed against 138 defendants including 42 doctors, nurses and other licensed medical professionals in 31 districts across the U.S.  It was part of a six-week nationwide federal law enforcement effort.

The DOJ said the fraud scheme fell into several categories, the largest of which was $1.1 billion in fraud committed using telemedicine. Another $29 million was COVID-19-related fraud; $133 million related to substance abuse treatment facilities or sober homes; and $160 million was connected to other healthcare fraud and illegal opioid distribution schemes across the U.S.

Telemedicine Schemes

According to court documents, the alleged telemedicine schemes were carried out by executives who allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic tests and pain medications, either without seeing the patients or with only brief telephonic conversations with patients they had never met or seen. These DME companies, testing labs and pharmacies then purchased the orders in exchange for illegal kickbacks and bribes resulting in $1.1 billion in false and fraudulent claims to Medicare and other government insurers. The DOJ said in some cases, medical professionals billed for “sham” telehealth visits that did not occur. Proceeds were spent on luxury items including cars, yachts and property.

As we have written about previously, when the pandemic struck, a public health emergency was declared, allowing the government to issue waivers that gave providers more flexibility in how to treat patients. While necessary for patient care, the flexibility also opened the door to increasing opportunities for fraud.

In September 2020, DOJ announced a historic takedown resulting in charges against 345 defendants responsible for more than $6 billion in alleged fraud losses, $4.5 billion of which was connected to telemedicine.

COVID-19 Fraud

With regard to the COVID-19 fraud, DOJ announced nine defendants are alleged to have engaged in various schemes designed to take advantage of the pandemic. Their actions allegedly resulted in the submission of $29 million in false billings.

DOJ noted that those charged are alleged to have exploited policies that were put in place by the Centers for Medicare & Medicaid (CMS) to allow for increased access to care during the pandemic, such as expanded telehealth regulations and rules. They allegedly misused patient information to submit claims to Medicare for unrelated, medically unnecessary, and expensive laboratory tests, including cancer genetic testing. As with the telemedicine crackdown, the crackdown on COVID-19 fraud builds on previous successes from earlier this year.

Sober Home Fraud

The sober home cases related to illegal kickback and bribery schemes involving the referral of patients to substance abuse treatment facilities; those patients could be subjected to medically unnecessary drug testing, resulting in the billing of thousands of dollars for a single test, as well as therapy sessions that often were billed, but not provided. This resulted in $133 million in fraudulent claims submitted to private insurers, DOJ stated.

Other Healthcare Fraud

Nineteen defendants, including several medical professionals and others, are alleged to have prescribed more than 12 million doses of opioids and other prescription drugs which resulted in $14 million in false claims.

DOJ stated that cases that fall into “more traditional” healthcare fraud categories include charges against 60 defendants who allegedly submitted more than $145 million in false and fraudulent claims to Medicare, Medicaid, TRICARE and private insurers for treatments that were not medically necessary and often never provided.

DOJ created a graphic detailing how some of these schemes were carried out.

Federal regulators have made it clear that they are cracking down on healthcare fraud in numerous ways. Providers should take steps to ensure that they are operating within the confines of the law.

Compliance plans should be in place, monitoring should be ongoing to ensure that medically necessary care is provided. With regulations constantly changing, it’s important that you have a healthcare attorney on your side who is knowledgeable about the latest laws and regulations.

The Health Law Offices of Anthony C. Vitale has been helping clients develop successful solutions for their legal and compliance issues for more than 30 years. Our team is prepared to assist in not only preventing your organization from running afoul of the law, but also in defending you should investigators come knocking.

For more information contact us at 305-358-4500 or email

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The Health Law Offices of Anthony C. Vitale