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Five Takeaways from DOJ’s Latest National Enforcement Action, Including Continued Focus on Opioids and Telemedicine

The U.S. Department of Justice (DOJ) recently announced its latest national enforcement action related to health care fraud (National Enforcement Action) in which DOJ filed criminal charges against 142 defendants. The National Enforcement Action, which alleges losses of $1.4 billion due to false or fraudulent billings, follows similar DOJ “take downs” over the last several years in that it focuses on telemedicine providers and the opioid crisis. This post provides five takeaways from the National Enforcement Action.

1. Opioid Addiction Remains a Hot Topic

Assistant Attorney General (AAG) Kenneth Polite, Jr. began and ended his remarks about the National Enforcement Action by expressing concern about the ongoing opioid addiction crisis and highlighting DOJ’s continued efforts to “aggressively prosecute” those who are contributing to it. However, the alleged fraud related to the illegal distribution of opioids accounted for only about 1% of the government’s alleged losses ($14 million), making it the smallest category of alleged fraud cited in the press release. As we discussed in our Health Care Enforcement 2020 Year in Review and 2021 Outlook, DOJ has closely scrutinized opioid-related activities for the last several years, but it is surprising that opioid-related charges accounted for a relatively small portion of the National Enforcement Action.

2. DOJ Continues to Focus on Telemedicine

The largest amount of alleged fraud – more than $1.1 billion – is related to false and fraudulent billings connected to telemedicine. The AAG and DOJ’s press release both specifically cited the ordering of medically unnecessary durable medical equipment (DME), prescriptions, and other items and services after no (or very limited) patient interaction as sources of the alleged fraud. The AAG recognized in his remarks that telemedicine is a very important tool for providing health care services, especially during the COVID-19 pandemic, but that it can be subject to abuse. Last year’s National Healthcare Fraud and Opioid Takedown, which we covered in our Health Care Enforcement 2020 Year in Review and 2021 Outlook, also focused heavily on alleged fraud involving medically unnecessary DME and prescriptions ordered via telemedicine. While the purported schemes targeted by the National Enforcement Action are unlike the robust telemedicine interactions with providers that have become increasingly utilized since the onset of COVID-19, we expect enforcement to follow the expansion of telemedicine.

3. COVID-19 Fraud Comes in a Variety of Forms and is a Growing Area of Enforcement

The National Enforcement Action makes clear that DOJ continues to pursue allegations of COVID-19 fraud. Some of the alleged fraud related to Medicare’s loosening of certain restrictions during COVID-19, such as the waiver of certain telemedicine requirements, which some providers allegedly used to submit false billings. In addition, DOJ charged five defendants for alleged fraud related to the Provider Relief Fund. The AAG explained in his remarks that these defendants did not actually have an operational medical practice and used the funds received from the Provider Relief Fund for personal purposes instead of running a medical practice as required. As we predicted, enforcement regarding COVID-19 relief funds will remain an area of enforcement focus.

4. Florida is a Key Area for DOJ Enforcement on Health Care Fraud

The U.S. Attorney’s Office for the Southern District of Florida issued its own press release about charges brought there. Notably, over one-third of the defendants in the National Enforcement Action were charged in the Southern District of Florida. The press release includes a quote from the Special Agent in Charge, FBI Miami, who stated that “South Florida is ground zero for health care fraud,” which does not comes as a surprise to most in the health care industry.  As noted in our Health Care Enforcement 2020 Year in Review and 2021 Outlook, health care qui tam cases are most often filed in major metropolitan areas, like Miami in the Southern District of Florida. In addition to South Florida, the Middle District of Florida, which covers Tampa, Orlando, and Jacksonville, had the highest number of qui tam cases unsealed last year.

5. Payment Suspensions Are an Alternative, Powerful Enforcement Tool

The AAG mentioned in his remarks that the Centers for Medicare & Medicaid Services (CMS) announced that it had imposed payment suspensions on over 20 providers in connection with the National Enforcement Action. Separate from DOJ’s criminal prosecutions, CMS has the ability to impose payment suspensions simply based on “reliable information” that there is fraud or an overpayment. Even if DOJ does not have enough evidence to bring criminal charges against providers, CMS’s payment suspensions are a powerful enforcement tool that can cripple providers financially and have caused many providers to go out of business. CMS seems to be increasingly using this authority in both the civil and criminal contexts in an effort to reverse the historic “pay and chase” model used to address Medicare fraud.   

©1994-2023 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 270

About this Author

Sarah Beth S. Kuyers, Mintz Levin, nonprofit affiliation lawyer, health care systems attorney

Sarah Beth’s practice involves a variety of regulatory, transactional, and enforcement defense matters for clinical laboratories, hospitals, pharmacies, insurers, and other health care clients.

Sarah Beth routinely advises clients on a wide variety of federal and state health care regulatory issues, including anti-kickback and self-referral laws, licensure and scope of practice rules, telemedicine, certificate of need applications, food and drug law, and HIPAA compliance. She also handles licensure and regulatory filings for clinical laboratories and other health care providers....

Brian P. Dunphy, Pharmaceutical Attorney, Mintz Levin, Anti-Kickback Lawyer,Health Care Enforcement & Investigations Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Complex Commercial Litigation

Brian has handled a wide range of health care litigation matters, government investigations, and voluntary disclosures for an array of health care providers, life sciences companies, and private equity funds and their portfolio companies. He defends clients against allegations of false claims for payment to the government, in SEC investigations and enforcement proceedings, and represents clients in complex business disputes. Brian also counsels clients on health care regulatory issues, including telemedicine laws, compliance with the federal Physician Payments Sunshine Act and analogous...

Karen Lovitch Mintz DC Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Medicare, Medicaid & Commercial Coverage & Reimbursement Health Care Transactions Health Care Transactional Due Diligence Health Care Enforcement & Investigations

Karen focuses her practice on representing health care companies in regulatory, transactional, and operational matters. She has a substantial health care regulatory background and advises clients on matters pertaining to the federal anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, the Clinical Laboratory Improvement Amendments of 1988, and the federal Physician Payments Sunshine Act. Karen often applies her strategic insight on these matters to counsel companies on regulatory issues arising in connection with mergers and acquisitions and other...