Kusserow on Compliance: DOJ moves on first criminal cases of COVID-19 fraud

The Department of Justice (DOJ) brought fraud charges against the president of a medical technology company in connection with a scheme to commit health care fraud with the submission of over $69 million in false and fraudulent claims for allergy and COVID-19 testing. The allegation is that he defrauded Medicare through illegal kickbacks and bribes and then turned to exploiting the pandemic by fraudulently promoting an unproven COVID-19 test to the market. The hoax leveraged off the fear of the pandemic with the company touting that his laboratory was the only one in the world that offered revolutionary “microarray technology,” which tested allergies and COVID-19 based on a drop of blood that was 250,000 times smaller than the amount required by technology touted by others.

The press announcement stated that beginning in or around 2018 and continuing to in or around February 2020, the company president and others paid kickbacks and bribes to recruiters and doctors to run an allergy screening test, using his Arrayit product, on every patient regardless of medical necessity, and then made numerous misrepresentations about the results. As the COVID-19 crisis began to escalate in March 2020, he and others made false claims concerning Arrayit’s ability to provide accurate, fast, reliable and cheap COVID-19 tests in compliance with state and federal regulations, and made numerous misrepresentations to potential investors about the COVID-19 tests and Arrayit’s future prospects for COVID-19 testing. The company president stated that it was simple to develop a test for COVID-19 because the switch from testing for allergies to testing for COVID-19 was a simple and easy step, but he and others never disclosed that there were questions about the validity of its data and the accuracy of its COVID-19 test. The press announcement reaffirmed that investigating COVID-19 fraud scams billed to federal health programs continues to be a top priority, noting that ongoing public health crisis has spawned a rash of fraudulent schemes.


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.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Upcoming Wolters Kluwer webinar covering expanded telehealth regulations during COVID-19

In response to COVID-19, there have been many recent state and federal changes affecting coverage and reimbursement of telehealth, including the CARES Act, recent regulatory guidance from CMS, state law waivers, and more.
Join Jeremy Sherer and Andrea Frey from Hooper, Lundy & Bookman as they examine the ongoing expansion by federal and state governments of telehealth to address the pandemic. Understand how clients and providers can take advantage of these changes, and the legal and business considerations to keep in mind when implementing telehealth programs, including consent, privacy, fraud and abuse, and licensure.
The webinar will take place on Thursday, April 23, 2020, at 1:00 PM EDT. Register now.