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Paul Zimmerman
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Justice Department Announces Unprecedented National Health Care Fraud Takedown

In what is being billed as the largest coordinated Medicare fraud takedown in Justice Department history, Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell have announced an unprecedented nationwide sweep led by the Medicare Fraud Strike Force. The result is criminal and civil charges against 301 individuals for their alleged participation in health care fraud schemes involving approximately $900 million in false billings. This is but the latest example of the government increasing its scrutiny of Medicare reimbursement claims, and using its considerable leverage, and the media, to tighten the screws on health care providers.

A Wave of Allegations

The Medicare Fraud Strike Force operates in nine locations and, since its inception, has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion.

Those caught in the latest sweep are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft.  The charges are based on fraud involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and prescription drugs.  More than 60 of those arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D.  The allegations involve submitting claims for services that were medically unnecessary or never provided (e.g., cash kickbacks were paid in return for supplying beneficiary information).   

Nationwide Sweep Extends Into California

The sweep spearheaded by the Medicare Fraud Strike Force includes cases brought by 26 U.S. Attorney’s Offices from across the nation. California physicians were among those targeted.

In the Central District of California, 22 defendants were charged for their roles in schemes to defraud Medicare of approximately $162 million. In one case, a doctor was charged with causing almost $12 million in losses to Medicare through his own fraudulent billing, allegedly performing medically unnecessary vein ablation procedures on Medicare beneficiaries. 

In the Southern District of California, eight individuals were charged in health care-related cases.  In one case, five individuals, including a doctor and a pharmacist, were charged in an alleged scheme to pay bribes and kickbacks to doctors in exchange for prescribing expensive durable medical equipment and compound pain creams that were not medically necessary.  The indictment alleges that approximately $27 million in false and fraudulent claims were submitted to insurers.

Health Care Billing Under the Microscope

This highly publicized sweep is just the latest example of the government (and private payors) cracking down on alleged billing fraud. While the overwhelming majority of health care providers are not deliberately engaging in money laundering, identity theft, and criminal conspiracies, the fact of the matter is that due to a limited group of bad actors, the entire health care industry is brought under the microscope. Providers must be vigilant in developing and adhering to compliance programs, favoring total transparency in the wake of this and similar coordinated actions targeting fraud and abuse within the health care industry. 

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.