July 4, 2022

Volume XII, Number 185

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DOJ Announces Enforcement Action Involving “Largest and Most Wide-Ranging” COVID-19 Fraud Detected to Date

On April 20, 2022, the Department of Justice (DOJ) announced a nationwide coordinated enforcement action targeting COVID-19-related fraud involving charges against 21 individuals across nine federal districts, and over $149 million in alleged false claims submitted to federal programs.[1]

This marks the first significant DOJ enforcement action since Attorney General Merrick Garland named Associate Deputy Attorney General Kevin Chambers as the Director for COVID-19 Fraud Enforcement on March 10, an appointment President Biden previewed in his State of the Union address on March 1.

DOJ’s enforcement action covers a broad range of alleged schemes, including misappropriation of Provider Relief Fund (PRF) payments for personal use, manufacture and distribution of fake COVID-19 vaccination record cards, and billing for health care services that were either unnecessary or never provided. A major area of reported enforcement involves clinical laboratories, with enforcement in that sector accounting for at least $125 million of the total $149 million in alleged false billings reported in connection with DOJ’s national takedown. Specific allegations involve, among other things, kickbacks, money laundering, unnecessary or excessive laboratory testing, and schemes where confidential patient information was obtained from drive-thru testing sites and then used in connection with false claims for complex in-office patient visits that never occurred. DOJ has issued a detailed summary of the charges referenced in the April 20 announcement, available here.

Beyond criminal enforcement, the Centers for Medicare & Medicaid Services also announced that it has taken an additional 28 administrative actions against health care providers for “alleged involvement in fraud, waste, and abuse schemes related to the delivery of care for COVID-19, as well as schemes that capitalize upon the public health emergency.”[2]

In a prior COVID-19 enforcement announcement from May 2021, where clinical laboratories were also touted as a top enforcement priority, DOJ reported similar criminal charges against 14 individuals, filed in seven federal districts across the United States, and involving over $143 million in alleged false claims submitted to federal programs, just slightly below the numbers that DOJ announced on April 20.[3] Our prior coverage of DOJ’s May 2021 announcement is available here.

In a trend that we anticipate will continue, DOJ’s recent enforcement announcement demonstrates an unwavering commitment to prosecution of COVID-19-related fraud while signaling that enforcement in connection with PRF payments and clinical laboratories remain top priorities. Given the amount of scrutiny the health care sector is under with respect to COVID-19-related issues, and the anticipated wave of enforcement and audit activity, it is imperative that health care providers and regulated entities are proactive in ensuring (and documenting) ongoing compliance with applicable federal and state laws and regulations, as well as the terms and conditions governing the receipt and use of pandemic relief payments, including those distributed from the PRF.

*          *          *

[1] See Department of Justice, “Justice Department Announces Nationwide Coordinated Law Enforcement Action to Combat Health Care-Related COVID-19 Fraud,” April 20, 2022, available at https://www.justice.gov/opa/pr/justice-department-announces-nationwide-coordinated-law-enforcement-action-combat-health-care.

[2] See id.

[3] See Department of Justice, “DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19,” May 26, 2021, available at https://www.justice.gov/opa/pr/doj-announces-coordinated-law-enforcement-action-combat-health-care-fraud-related-covid-19.

©2022 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XII, Number 123
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About this Author

George Breen, Health Care Attorney, Epstein Becker Law Firm
Member

GEORGE B. BREEN is a Member of the Firm in the Health Care and Life Sciences and Litigation practices. He is Chair of the firm's National Health Care and Life Sciences Practice Steering Committee and a member of the firm's Board of Directors.

Mr. Breen:

  • Defends clients undergoing investigation for health care fraud by the Department of Justice, the Department of Health and Human Services Office of the Inspector General, and other state and federal governmental authorities
  • ...
202-861-1823
Erica Sibley Bahnsen White Collar Investigations Attorney Washington DC Epstein Becker Green
Member of the Firm

Clients across the health care and life sciences spectrum look to attorney Erica Sibley Bahnsen for help in navigating complex False Claims Act and white collar internal investigations, grand jury probes and other criminal investigations, and agency investigations.

Erica regularly represents hospitals, national provider staffing services, dietary supplement manufacturers, and providers of emergency services, dermatology, and other medical specialties in a variety of enforcement matters at both the state and federal levels. Erica focuses her...

202-861-1867
Daniel C. Fundakowski Pharmaceutical and Healthcare Attorney Epstein, Becker & Green Law Firm
Member of the Firm

Daniel C. Fundakowski s a Senior Counsel in the Health Care & Life Sciences and Litigation & Business Disputes practices in the Washington, DC, office of Epstein Becker Green. His practice focuses on representing leading pharmaceutical and device manufacturers, retail pharmacy chains, compounding pharmacies, academic medical centers, skilled nursing facilities, and other institutional providers in health care regulatory and litigation matters.

Services

Mr. Fundakowski’s services include:

...
202-861-1826
Elizabeth A. Harris Health Care Attorney Epstein Becker & Green Washington, DC
Associate

Elizabeth A. Harris is an Associate in the Health Care and Life Sciences practice, in the Washington, DC, office of Epstein Becker Green. She focuses her practice on health care government investigations and litigation matters.

Specifically, Ms. Harris:

  • Provides assistance to health care clients undergoing inquiries, audits, or investigations by the U.S. Department of Justice, the U.S. Department of Health and Human Services' Office of Inspector General, and other state and federal government authorities
  • Represents clients in litigation arising...
202-861-1873
Eleanor T. Chung Health Care Attorney Washington DC Epstein Becker Green
Associate

Eleanor handles complex litigation and appeals in the areas of health care litigation, health care fraud and abuse, long-term care, and federal and state False Claims Act matters. She is particularly knowledgeable in the areas of data protection and privacy, managed care, long-term care survey and inspection, and the liability of health care professionals. Health care clients value her ability to translate complex legal concepts into common-sense, plain English.

Before joining Epstein Becker Green, Eleanor worked as a litigator at a regional law...

202-861-1846
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