On June 30, the Department of Justice (DOJ) announced the largest coordinated health care fraud enforcement effort in U.S. history, involving criminal charges against over 300 defendants and over $14.6 billion in health care claims. The cases include “Operation Gold Rush” in the Eastern District of New York, in which DOJ — consistent with its belief about organized crime’s increasing influence in health care — alleges 11 defendants were part of a transnational criminal organization responsible for $10.6 billion in fraudulent durable medical equipment (DME) claims, the largest-ever intended loss amount charged in a health care fraud case.
DOJ’s case summaries, including criminal charges against 96 medical professionals, serve as important reminders for institutional and individual health care providers.
- Mining Claims Data. DOJ cited the government’s cross-agency efforts to “leverage cloud computing, artificial intelligence, and advanced analytics to identify emerging health care fraud schemes.” Providers must stay ahead of the curve and, as a foundational part of any risk management program, regularly mine and analyze their own claims data to identify and address potentially problematic trends, patterns and outliers.
- Ensnaring Providers. Criminal schemes are becoming more sophisticated, with DOJ charging criminal cases that allegedly involved the use of artificial intelligence (AI) to create fake patient recordings, fake and deceptive provider websites, and “doctor chasers” who create false documents to induce practitioners to sign off on unnecessary or phantom tests and services for their patients. Vigilance is key, and primary care providers in particular — who often have the closest relationships to their patients — should take the time to scrutinize and verify unsolicited requests from new or unknown companies.
- COVID Programs. DOJ continues to prosecute pandemic-era conduct, including with respect to Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loans and other programs — such as a now-closed Medicare program covering over-the-counter COVID tests — that temporarily eased federal and state restrictions and expanded access to health care. Providers should evaluate their historical compliance with these programs given recent enforcement actions that, with the benefit of hindsight, take a different view of guidance that may have seemed unclear at the time.
- Following the Money. Criminal health care fraud sentences are largely driven by loss amounts. DOJ is therefore targeting high-volume and high-cost service lines, procedures and products such as DME, “high-reimbursement medication,” laboratory services and genetic testing, expensive diagnostic procedures and telemedicine. Providers should expect similar high-cost and high-volume areas will remain under increased scrutiny.
- Drug Diversion. DOJ continues to target the illegal prescription and diversion of opioids and other commonly abused prescription drugs. In institutional and home-based care settings, tampering cases — in which an employed or contracted individual steals medication and replaces it with saline or a less-effective drug — are on the rise. Providers need to have access monitoring measures in place and take affirmative steps to prevent, detect and report this conduct.
- Federal, State and Private/Commercial Payers. Health care fraud is not just Medicare fraud. While the civil False Claims Act only concerns claims submitted to federally-funded health care programs such as Medicare and Medicaid, the criminal health care fraud statute reaches any health care benefit program — public or private — that affects commerce. DOJ continues to charge cases involving claims submitted to private payers such as Blue Cross Blue Shield of Michigan, AFLAC and other commercial insurers, along with federal programs such as the Federal Employees’ Compensation Program.
- DOJ’s Extensive Toolkit. Beyond the criminal health care fraud statute, 18 U.S.C. § 1347, DOJ uses all available statutes that apply to conduct in providing and billing for health care services, including the Controlled Substances Act, the Food, Drug and Cosmetic Act, wire fraud, mail fraud, identity theft, money laundering and access device fraud. Providers also need to be aware of 18 U.S.C. § 1035 — a five-year felony offense — which reaches beyond false claims and only requires the government prove a statement or document made or used “in connection with the delivery of or payment for health care benefits, items, or services” was materially false, even if that statement or document was not submitted to the government or an insurer.
