On September 30, 2020, the Department of Justice (“DOJ”) announced its latest health care fraud take down, which was its first since the pandemic hit in March 2020. DOJ charged 345 doctors, medical professionals, owners/operators, and others with criminal health care fraud schemes implicating more than $6 billion in total alleged loss amount. Arriving six months into the COVID-19 pandemic, this health care fraud take down was DOJ’s largest to date, sweeping across the 51 judicial districts shown in this DOJ graphic:
Telemedicine: the COVID-19 Healthcare Fraud Flavor of the Pandemic
With $4.5 billion of the aggregate take down amount connected to alleged telemedicine fraud and only $800 million linked to opioids, DOJ shows that it is both focusing on COVID-19 related health care fraud and “following the money” as the pandemic continues. Telemedicine has obviously been a lifeline for patients during the pandemic as people are sheltering in place and avoiding leaving their homes. History shows that fraud schemes follow “opportunities” created by crisis and DOJ has now shown that it recognized early on that telemedicine fraud would explode during COVID-19.
As to be expected during a pandemic where telemedicine accelerated in relevance and billings to Medicare, opioid enforcement took a back seat during this take down. Two years ago, in October 2018, DOJ stood up the Appalachian Regional Prescription Opioid (ARPO) Strike Force to combat the opioid epidemic in parts of the country that have been particularly harmed by addiction. As the fraud arising out of COVID-19 has taken priority, opioid enforcement efforts have been scaled back.
Lack of Access to Grand Juries
Also notable for this take down was DOJ’s reliance on charging via Complaint and Information. With grand juries not operating during much of the past six months, or only operating on a limited basis more recently, prosecutors were unable to present their cases to grand juries to obtain indictments. Instead, DOJ turned to charging via Complaint (which does not require the use of a grand jury) and also filed many Informations, which require the consent of the defendant and accompany a plea deal. While charging by Complaint is fairly straightforward, reaching the dozens of plea deals (as evidenced by the Informations) requires much more behind the scenes work and shows that DOJ was pressing to cut deals during the pandemic.
DOJ Announces Creation of “National Rapid Response Strike Force”
Concurrent with the announcement of the take down, the Health Care Fraud Unit of the Criminal Division’s Fraud Section announced the creation of National Rapid Response Strike Force (“NRRSF”). The NRRSF’s mission is to investigate and prosecute fraud cases involving “major health care providers” operating in multiple jurisdictions. The NRRSF will focus on “complex national schemes” and will coordinate with the Civil Division’s Fraud Section and Consumer Protection Branch, as well as its traditional partners in the local U.S. Attorney’s Offices, state Medicaid Fraud Control Units, the FBI and HHS-OIG. The NRRSF appears to be the new version of the prior sub-unit referred to as the Corporate Health Care Fraud Strike Force.
Examples of the types of matters under the NRRSF’s purview include a large-scale rural hospitals billing fraud matter indicted in the Middle District of Florida and the prior global resolution with Tenet Healthcare Corporation. Look for the NRRSF to be the new go-to DOJ unit to investigate corporate health care fraud.
Look for “Pay and Chase” to Continue Indefinitely
While no one can quibble with the stats the Health Care Fraud Unit has amassed since its inception in 2007 – 4,200 defendants charged for over $19 billion in losses to Medicare – the current federal health care fraud law enforcement strategy is one of “pay and chase”. In other words, Medicare pays out claims quickly, and then DOJ tries to police fraudulent activity once the money has left federal coffers. Given that most of the fraudulent pay outs are never recouped through criminal forfeiture or restitution, this “pay and chase” system is inherently flawed as a method of preventing bad actors from fleecing the Medicare system. But don’t look for this to change anytime soon. But given the non-partisan appeal of fighting health care fraud, we expect increasingly more federal and DOJ resources to be committed to health care fraud investigations and prosecutions.