The Department of Justice (DOJ) announced criminal charges against 14 defendants in seven federal districts across the United States for their alleged participation in various healthcare fraud schemes related to the COVID-19 pandemic. These healthcare fraud schemes resulted in over $143 million in false billings.
Additionally, the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) also announced that they took adverse administrative actions against over 50 medical providers for their involvement in healthcare fraud schemes related to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.
One of the fraud schemes involved multiple defendants offering COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants then allegedly misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary and more expensive laboratory tests, including cancer generic testing, allergy testing, and respiratory pathogen panel tests. In some of the cases, it is alleged that the COVID-19 test results were not provided to the beneficiaries in a timely manner or were not reliable, risking the further spread of the disease. The genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary doctors. The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.
In a different COVID-19 healthcare fraud scheme, defendants are alleged to have exploited policies that were put in place by CMS to enable increased access to care during the COVID-19 pandemic. Pursuant to the COVID-19 emergency declaration, telehealth regulations and rules were broadened so that Medicare beneficiaries could receive a wider range of services from their doctors without having to travel to a medical facility. These cases include first-in-the-nation charges for allegedly exploiting these expanded policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that did not occur. As part of these cases, medical professionals are alleged to have offered and paid bribes in exchange for the medical professionals’ referral of medically unnecessary testing.
A third set of criminal charges was also announced related to the misuse of Provider Relief Fund monies. The Provider Relief Fund is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The federal CARES Act, which was enacted in March 2020, is designed to provide needed medical care to Americans suffering from COVID-19. In one of these cases, an owner of two laboratory testing companies in Arkansas is charged by criminal complaint with healthcare fraud in connection with an alleged scheme to defraud the United States of over $88 million, including over $42 million in false and fraudulent claims during the COVID-19 pandemic. Allegedly, the owner used access to beneficiary and medical provider information from prior laboratory testing orders to submit fraudulent claims for urine drug tests and other laboratory tests, including respiratory pathogen panel and COVID-19 tests that were not actually ordered or performed. The complaint also alleges that hundreds of claims were submitted for beneficiaries after they had died or otherwise ceased providing samples.
The DOJ is requesting the public’s assistance in remaining vigilant and reporting suspected fraudulent activity. To report suspected fraud, contact the National Center for Disaster Fraud (NCDF) at (866) 720-5721 or file an online complaint at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form. Complaints filed will be reviewed at the NCDF and referred to federal, state, local, or international law enforcement or regulatory agencies for investigation.
The DOJ’s COVID response site can be accessed at: Coronavirus Response | Department of Justice. Further information on DOJ’s Criminal Division’s enforcement efforts on personal protective equipment fraud, including court documents from significant cases, can be accessed at Fraud Section Enforcement Related to the CARES Act (justice.gov).
Issue:
The pandemic has brought many new challenges to nursing facilities across the country. Government agencies have increased their scrutiny of care and services provided by nursing facilities during the pandemic to the extent that has not been seen in the past. Ensure that all claims being submitted are accurate, and that the services that are provided are medically necessary. All members of the healthcare team with responsibilities for submitting claims should be knowledgeable about the CARES Act and what constitutes a false claim. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 2 Financial Integrity.
Discussion Points:
- Review policies and procedures for preventing and reporting a false claim or anti-kickback statute violation. Update your policies and procedures as needed.
- Train all staff on the False Claims Act and Anti-Kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what they should do if they suspect that a false claim has been submitted or that an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress into a false claim.
