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United States government announces largest healthcare and opioid enforcement action in history

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The US Department of Justice (USDOJ) announced a historic nationwide enforcement action against healthcare fraud.  This unprecedented initiative involves 345 charged defendants in 51 federal districts, including more than 100 doctors, nurses, and other licensed medical professionals.

The defendants are accused of submitting more than US$6 billion in false and fraudulent claims to federal health care programs and private insurers in the US – including more than US$4.5 billion connected to telemedicine, more than US$845 million related to addiction recovery facilities, and more than US$806 million related to other healthcare fraud and illegal opioid distribution schemes across the country.

The enforcement actions were coordinated by the Criminal Division, Fraud Section’s Healthcare Fraud Unit, in conjunction with its Health Care Fraud and Regional Appalachian Prescription Opioid Program (ARPO) to Combat Health Fraud and Opioid Prescription (ARPO) Strike Force and its core partners: 43 Offices of the US Attorney General, HHS-OIG, FBI, and DEA.

The irregularities identified in this historic enforcement fall into three broad categories:

  1. Telemedicine fraud.
  2. Fraud that is associated with substance abuse facilities.
  3. Cases involving the illegal prescription and/or distribution of opioids and cases involving traditional healthcare fraud schemes.

1. CASES OF TELEMEDICINE FRAUD

The largest amount of alleged fraud loss – US$ 4.5 billion in allegedly false and fraudulent claims made by 86 defendants in 19 judicial districts – are related to schemes involving telemedicine:  the use of telecommunications technology to provide healthcare services remotely.

According to court filings, certain defendant telemedicine executives allegedly paid doctors and nurses to order unnecessary durable medical equipment, genetic and other diagnostic tests, and pain medications, either without any patient interaction or with only a brief phone conversation with patients who they had never met or had seen. Durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased these orders in exchange for illegal bribes or kickbacks and submitted false and fraudulent claims to Medicare and other government insurers.

2. CASES OF FRAUD IN SUBSTANCE ABUSE FACILITIES

Fraud cases associated with addiction recovery facilities include charges against more than a dozen criminal defendants in connection with more than US$845 million false and fraudulent requests for tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction.  , burdening federal health programs and private insurance companies.

Defendants include doctors, owners, and operators of substance abuse treatment facilities, as well as patient recruiters (referred to in the industry as “body brokers”). These individuals are alleged to have participated in schemes involving the payment of illegal kickbacks and bribes to refer dozens of patients to substance abuse facilities.

Those patients were subjected to medically unnecessary drug tests - often billing thousands of dollars for a single test - and therapy sessions that were often not provided. These practices resulted in millions of dollars in false and fraudulent claims submitted to private insurers.

Medical professionals also allegedly prescribed clinically unnecessary controlled substances and other medications for these patients, sometimes to induce them to remain at these facilities.

Patients were often discharged and admitted to other treatment facilities or referred to other laboratories and clinics in exchange for more kickbacks.

3. CASES INVOLVING THE ILLEGAL PRESCRIPTION AND/OR DISTRIBUTION OF OPIOIDS AND CASES INVOLVING TRADITIONAL HEALTHCARE FRAUD SCHEMES

These cases involving the illegal prescription and/or distribution of opioids or that fall into more traditional categories of healthcare fraud include charges and guilty pleas involving more than 240 defendants who allegedly participated in schemes to submit more than US$800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE (all US federal healthcare programs), and private insurance companies for treatments that were medically unnecessary and often never provided.

According to court documents, in many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash bribes in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare.  Also included are charges against medical professionals and others involved in the distribution of more than 30 million doses of opioids and other prescription narcotics.

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