Kusserow on Compliance: DOJ announced largest health care fraud case in its history

The Department of Justice (DOJ) announced a joint investigation involving the HHS OIG, FBI, and DEA which resulted in a historic nationwide enforcement action involving 345 charged defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals, who submitted more than $6 billion in false and fraudulent claims to federal health care programs and private insurers.

The largest amount of alleged fraud loss charged was $4.5 billion in claims submitted by more than 86 criminal defendants in 19 judicial districts related to schemes involving telemedicine. Telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment (DME), genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. DME companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers.

In the “sober homes” cases, there were a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for patients seeking treatment for drug and/or alcohol addiction. Defendants included physicians, owners and operators of substance abuse treatment facilities, as well as patient recruiters, who allegedly participated in schemes involving the payment of illegal kickbacks and bribes for the referral of scores of patients to substance abuse treatment facilities who were subjected to medically unnecessary drug testing and therapy sessions that were frequently not provided. The patients were then often discharged and admitted to other treatment facilities, or referred to other laboratories and clinics, in exchange for more kickbacks.

Other cases involved illegal prescription and/or distribution of opioids and other frauds involving more than 240 defendants allegedly participating in schemes to submit more than $800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries, and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Also included were charges against medical professionals and others involved in the distribution of more than 30 million doses of opioids and other prescription narcotics.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

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