Feds Recover $3.1B in FY 2020 Resulting From Healthcare Fraud Investigations

The federal government recouped nearly $3.1 billion last year following investigations into healthcare fraud, according to a new report released by the U.S. Department of Health and Human Services and the Department of Justice.

The annual report noted that DOJ opened 1,148 new criminal healthcare fraud investigations in 2020, filing criminal charges in 412 cases involving 679 defendants. Of those, 440 defendants were convicted of healthcare fraud related crimes.

In addition, the DOJ opened 1,079 new civil healthcare fraud investigations in 2020.

The FBI, which often is called in to investigate these crimes, reported its investigations resulted in more than 407 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 101 healthcare fraud criminal enterprises. 

Meantime, investigations conducted by the Health and Human Services Office of the Inspector General (HHS-OIG) resulted in 578 criminal actions against individuals or entities that engaged in Medicare- or Medicaid-related crimes. It also reported another 781 civil actions, which include false claims and unjust enrichment lawsuits filed in federal court, civil monetary penalty settlements and administrative recoveries relating to provider self-disclosure matters.

As a result of these cases, 2,148 individuals and entities were excluded from participation in Medicare, Medicaid and other federal healthcare programs. This is one important mechanism that can be used to prevent further fraud and abuse.

Last year, the DOJ announced the creation of a National Rapid Response Strike Force made up of prosecutors who target large-scale, multi-jurisdictional schemes across the country. Among their cases was an alleged $1.4 billion billing fraud scheme perpetrated through a series of rural hospitals.

Opioid Fraud

The Opioid Fraud and Abuse Detection Unit, formed in 2017, got a two-year extension in 2020 after a favorable performance review. Last year, the program handled hundreds of investigations and prosecutions involving medical professionals who were charged with a range of crimes including healthcare fraud, drug trafficking and money laundering.

COVID-19 Related Enforcement

Since the start of the pandemic, the Centers for Medicare & Medicaid Services (CMS) has looked at how the public health emergency, specifically waivers and flexibilities designed to make it easier for people to access care, have created new fraud risks.

CMS developed a robust fraud risk assessment process and mitigation strategies. The DOJ is working with CMS, HHS-OIG and other law enforcement agencies to investigate and prosecute fraud resulting from the pandemic.

Investigators found, among other things, providers requiring tests in addition to the COVID-19 test, such as expensive and medically unnecessary respirator, allergy and genetic testing. They also have uncovered fraudulent COVID-19 testing, treatments or “cures” used to defraud insurance carriers. And, they have investigated the filing of false claims and applications for federal relief funds.

The report highlights numerous significant criminal and civil investigations including:

In June 2020, two owners of an ambulance and transportation services company located in Guam, were sentenced to serve 71 and 63 months, respectively, in federal prison and ordered to pay $10.8 million in restitution in connection with their October 2019 guilty pleas. The defendants engaged in a conspiracy to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services that the company provided to patients with end-stage renal disease who did not qualify for such transportation.

After a three-month trial, four defendants were found guilty in Tennessee in connection with their roles in the operation of four pain clinics that evidence showed were operating as pill mills. A part owner of the clinic and three nurses were convicted of distributing more than 11 million pain pills with a street value of $360 million and generating more than $21 million for the clinic.

In June 2020, Novartis Pharmaceuticals Corp., agreed to pay $642 million to resolve civil False Claims Act allegations. In one settlement, the case involved the use of three foundations as conduits to pay the copayments of Medicare patients taking one of its drugs. In the other case, Novartis resolved claims it was paying kickbacks to doctors in the form of sham speaker fees to induce them to prescribe the drug-maker’s medications.

In January 2020, the owner of several durable medical equipment supply companies was convicted of paying kickbacks and bribes in exchange for signed doctors’ orders for medically unnecessary orthotic braces. The companies billed Medicare and TRICARE $125.1 million and received $70.3 million. The owner pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to six years and eight months in prison and ordered to pay restitution of $70.3 million. He also had to forfeit $35.1 million.

Federal investigators found fraud in just about every corner of the healthcare world. Other cases involved home healthcare providers, hospice care, hospitals and health systems, laboratories, medical devices, nursing homes, occupational and physical therapy, pharmacies, physicians, psychiatric and psychological testing, and substance abuse treatment centers.

For a full report click here.

The Health Law Offices of Anthony C. Vitale has been representing clients under investigation for more than 30 years. We know how stressful it can be if you become the target of a healthcare fraud investigation. Our long-standing experience allows us to help clients to prepare for an investigation and to limit liability and minimize potential damage. For more information call us at 305-358-4500 or email info@vitalehealthlaw.com.

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