Telehealth Frauds Featured In DoJ Healthcare Fraud Roundup

The Department of Justice's Office of Public Affairs just issued a roundup of their health care fraud enforcements so far in 2024.  Criminal charges have been filed against 193 defendants, including 76 doctors, nurse practitioners, and other licensed medical professionals across the United States for their alleged participation in schemes which resulted in $ 1.6 billion of losses.

Of particular note: Medical fraudsters are now taking advantage of telehealth's looser strictures to defraud the government and insuance companies:

https://www.justice.gov/opa/pr/national-health-care-fraud-enforcement-action-results-193-defendants-charged-and-over-275-0

National Health Care Fraud Enforcement Action Results in 193 Defendants Charged and Over $2.75 Billion in False Claims
June 27, 2024

The Justice Department today announced the 2024 National Health Care Fraud Enforcement Action, which resulted in criminal charges against 193 defendants, including 76 doctors, nurse practitioners, and other licensed medical professionals in 32 federal districts across the United States, for their alleged participation in various health care fraud schemes involving approximately $2.75 billion in intended losses and $1.6 billion in actual losses.

In connection with the coordinated nationwide law enforcement action, and together with federal and state law enforcement partners, the government seized over $231 million in cash, luxury vehicles, gold, and other assets.

“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” said Attorney General Merrick B. Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”

“The extraordinary Special Agents of Homeland Security Investigations (HSI) were proud to play an integral role in this multi-agency investigation and national takedown of healthcare fraud,” said Secretary of Homeland Security Alejandro N. Mayorkas. “Through this action, we in federal law enforcement send a clear and strong message—that we will hold accountable those health care providers and prescribers who prey on their patients for profit and disregard the first rule of medical care: do no harm.”

“Healthcare fraud victimizes patients, endangers the health of vulnerable people, and plunders healthcare programs,” said FBI Director Christopher Wray. “This wide-ranging collaboration demonstrates the FBI’s commitment to rooting out predatory healthcare fraud, protecting patients, and ensuring critical healthcare funds go where they are needed most.”

The charges alleged include over $900 million fraud scheme committed in connection with amniotic wound grafts; the unlawful distribution of millions of pills of Adderall and other stimulants by five defendants associated with a digital technology company; an over $90 million fraud committed by corporate executives distributing adulterated and misbranded HIV medication; over $146 million in fraudulent addiction treatment schemes; over $1.1 billion in telemedicine and laboratory fraud; and over $450 million in other health care fraud and opioid schemes.

“Health care fraud affects every American,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “It siphons off hard-earned tax dollars meant to provide care for the vulnerable and disabled. In doing so, it also raises the cost of care for all patients. Even worse, as the prosecutions we announce today underscore, health care fraud can harm patients and fuel addiction. The Criminal Division is committed to rooting out health care fraud, wherever it may be found, no matter who commits it. And we are using more tools than ever before to uncover misconduct and hold wrongdoers to account, whether they are executives in corner offices or doctors who violate their oaths.”

Today’s enforcement action was led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section and its core partners: U.S. Attorneys’ Offices, the Department of Health and Human Services Office of Inspector General (HHS-OIG), FBI, and Drug Enforcement Administration (DEA). The cases were investigated by agents from the division’s core partner agencies along with other federal and state law enforcement agencies. The cases are being prosecuted by Health Care Fraud Strike Force teams from the Criminal Division’s Fraud Section, 32 U.S. Attorneys’ Offices nationwide, and 11 State Attorney Generals’ Offices.

“This work is important to the Department of Health and Human Services (HHS) and the millions of Americans we serve. HHS vigorously pursues anyone who commits fraud against our health care programs. But it takes all of us, working together, to be successful,” said HHS Deputy Secretary Andrea Palm. “Those who steal from these programs are stealing from the American families who rely on them and putting patients at risk. We won’t stop until all those who try to defraud the federal government are caught and held accountable.”

“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” said the HHS-OIG Inspector General Christi A. Grimm. “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”

Amniotic Wound Grafts

Charges were filed in the District of Arizona against four individuals who allegedly filed $900 million in false and fraudulent claims to Medicare for amniotic wound grafts used on Medicare patients. As alleged, the defendants targeted elderly Medicare patients, many of whom were terminally ill. The defendants caused medically unnecessary and expensive amniotic grafts to be applied to these vulnerable patients’ wounds indiscriminately, without coordination with the patients’ treating physicians and without proper treatment for infection, to superficial wounds that did not need this treatment, and in sizes that far exceeded the size of the wound. In just 16 months, Medicare paid two defendants more than $600 million as a result of their fraud scheme, paying on average more than a million dollars per patient for these unnecessary grafts. These two defendants owned wound care companies in Arizona and received more than $330 million in illegal kickbacks in exchange for purchasing the grafts billed to Medicare. In connection with the charges, the government seized over $70 million, including four luxury vehicles, gold, jewelry, and cash.

“Every dollar saved by investigating fraud is critical to the sustainability of the Medicare program and the needs of the people who depend on it,” said Administrator Chiquita Brooks-LaSure of the Centers for Medicare & Medicaid Services (CMS). “In addition to the actions taken by the Justice Department, CMS took 127 administrative actions in the last six months separately against providers for their alleged involvement in health care fraud schemes. We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working closely with us to identify, investigate, and eliminate waste, fraud, and abuse in our federal health care programs.”

Distribution of Adderall and Other Stimulants

Five additional defendants associated with digital technology company Done Global Inc. and its affiliated entity, Done Health P.C. (collectively, “Done”), were charged for the unlawful distribution of millions of Adderall pills. The CEO and Clinical President of Done were charged on June 13 in a scheme to distribute Adderall and other stimulants over the internet. The charges announced today include those against one of the most prolific prescribers working for Done, a Florida nurse practitioner who prescribed over 1.5 million pills of Adderall and other stimulants to patients across the United States. The indictment alleges that the nurse practitioner prescribed Adderall and other stimulants without interaction with patients, pursuant to Done’s “auto-refill” policy. This policy allowed patients to obtain continued prescriptions after an initial encounter without any further audio or visual interaction with a medical professional. This allegedly resulted in the nurse practitioner prescribing Adderall and other stimulants to individuals suffering from drug addiction and continuing to issue Adderall prescriptions for months after the overdose deaths of patients.

“DEA works tirelessly to protect the public from harm, be it cartels funneling fentanyl into our communities or medical providers caring more about profits than patients,” said DEA Administrator Anne Milgram. “The CEO and clinical director of Done Global Inc. are charged with over-prescribing millions of unneeded stimulant pills, potentially putting patients in danger and exacerbating the current stimulant medicine shortage. The seriousness of these actions should not be understated. DEA will continue to hold anyone accountable who endangers the health and well-being of Americans.”

Diverted HIV Medication

Three owners and executives of a wholesale distributor of pharmaceutical drugs were charged in connection with an alleged $90 million wire fraud conspiracy to introduce adulterated and misbranded HIV drugs into the market. The HIV drugs were allegedly acquired through unlawful “buyback” schemes in which previously dispensed bottles of prescription drugs were bought from vulnerable patients. The defendants allegedly purchased these drugs from the black market and resold them to pharmacies throughout the country with falsified documentation designed to conceal the true source of the medication. Pharmacies then dispensed these diverted HIV medications to unsuspecting patients. At times, patients received bottles labeled as their prescription medication, but the bottles contained a different drug entirely, with one patient passing out and remaining unconscious for 24 hours after taking an anti-psychotic drug thinking it was his prescribed HIV medication.

Addiction Treatment Cases

The addiction treatment cases announced today include charges filed in the District of Arizona and Southern District of Florida against four defendants in connection with more than $146 million of allegedly false and fraudulent claims for services for vulnerable patients seeking treatment for drug or alcohol addiction. As alleged in one of the indictments, one defendant paid kickbacks in exchange for the referral of patients recruited from the homeless population and Native American reservations. She then fraudulently billed Arizona Medicaid for substance abuse treatment services that were either never provided or were provided at a level that was so substandard that it failed to serve any treatment purpose. The defendant is charged with money laundering offenses for her lavish purchases with the fraud proceeds, as well as obstruction of justice for allegedly falsifying records in response to a grand jury subpoena for documents.

Telemedicine and Laboratory Fraud Cases

Thirty-six defendants were charged in connection with the submission of over $1.1 billion in fraudulent claims to Medicare resulting from telemedicine schemes. For example, in separate cases involving similar schemes that were perpetrated by different criminal networks in the Southern District of Texas, Northern District of Texas, and District of New Jersey, clinical laboratory owners allegedly paid illegal kickbacks and bribes, including to telemedicine companies, in exchange for the referral of orders for unnecessary genetic testing. The results of these genetic tests—which were supposed to detect genetic mutations that could indicate an elevated risk of cancer, cardiovascular disease, Parkinson’s disease, and other serious illness—were not used in the patients’ treatment. Other telemedicine schemes included the unsealing of a complaint in the Eastern District of Virginia against a psychiatrist who allegedly submitted fraudulent claims based on minimal patient interactions, including for visits that lasted between 10 to 30 seconds. The continued focus on prosecuting health care fraud schemes involving telemedicine reflects the Department’s commitment to rooting out these schemes, which has saved taxpayers billions of dollars.

Cases Involving the Illegal Prescription and Distribution of Opioids and Other Health Care Fraud Schemes

The other cases announced today charge 14 defendants with crimes related to the illegal prescription and distribution of opioids that resulted in millions in false billings, including several charges against medical professionals and others who prescribed unnecessary opioids, Suboxone, and other controlled substances.

An additional 126 defendants are charged with various other health care fraud schemes involving over $450 million in false and fraudulent claims to Medicare, Medicaid, and private insurance companies for treatments that were medically unnecessary or never provided. Ten defendants across the country were charged in connection with fraudulent COVID-19 testing, including an over $65 million scheme charged in the Southern District of Florida.

The Center for Program Integrity of the Centers for Medicare and Medicaid Services (CPI/CMS) separately announced today that it took adverse administrative actions in the last six months against 127 medical providers for their alleged involvement in health care fraud.

Principal Assistant Deputy Chief Jacob Foster, Assistant Chief Rebecca Yuan, and Trial Attorney Miriam L. Glaser Dauermann of the Health Care Fraud Unit of the Criminal Division’s Fraud Section led and coordinated today’s enforcement action. The cases are being prosecuted by the Health Care Fraud Unit’s National Rapid Response, Florida, Gulf Coast, Los Angeles, Midwest, Northeast, and Texas Strike Forces; U.S. Attorneys’ Offices for the Southern District of Alabama, District of Arizona, Central District of California, Northern District of California, Southern District of California, District of Connecticut, Middle District of Florida, Southern District of Florida, Northern District of Illinois, Eastern District of Kentucky, Western District of Kentucky, Eastern District of Louisiana, Middle District of Louisiana, Western District of Louisiana, Eastern District of Michigan, Western District of Michigan, Southern District of Mississippi, District of Montana, District of New Jersey, Eastern District of New York, Eastern District of North Carolina, Western District of Oklahoma, District of Rhode Island, Eastern District of Tennessee, Middle District of Tennessee, Eastern District of Texas, Northern District of Texas, Southern District of Texas, Eastern District of Virginia, Western District of Virginia, Southern District of West Virginia, and Eastern District of Wisconsin; and State Attorney Generals’ Offices for Arizona, California, Illinois, Indiana, Louisiana, New York, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, and South Dakota. The Health Care Fraud Unit’s Data Analytics Team used cutting-edge data analytics to identify and support the investigations that led to these charges.

In addition to the FBI, HHS-OIG, DEA, and CMS/CPI, HSI, IRS Criminal Investigation, Department of Veterans Affairs Office of Inspector General, Defense Criminal Investigative Service, Department of Labor, United States Postal Service Office of Inspector General, and other federal, state, and local law enforcement agencies participated in the operation. The Medicaid Fraud Control Units of the states of Arizona, California, Connecticut, Florida, Illinois, Indiana, Kentucky, Louisiana, New York, North Carolina, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Texas, and Virginia also participated in the investigation of many of the federal and state cases announced today.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force. Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which operates in 27 districts, charged more than 5,400 defendants who collectively billed Medicare, Medicaid, and private health insurers more than $27 billion.

An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The following documents related to today’s announcement are available on the Health Care Fraud Unit website through these links:

Graphics and Resources
Case Descriptions
Court Documents