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More Than 400 Charged in Largest-Ever Health Care Fraud Enforcement Action, While Hundreds More Face Potential Exclusion

The Department of Justice (DOJ) announced on July 13 what it’s calling the largest-ever health care fraud enforcement action. The action, led by the Medicare Fraud Strike Force, involves criminal charges against 412 defendants—including 115 physicians, nurses and other licensed medical professionals—for allegedly participating in health care fraud schemes involving approximately $1.3 billion in supposed false billings.

The charges target alleged schemes to bill Medicare, Medicaid and TRICARE for supposed medically unnecessary prescription drugs and compounded medications, or for drugs and medications that were not actually dispensed. A large number of charges allege the unlawful prescription of opioids and other prescription narcotics. Of those charged, more than 120 defendants were charged for their role in prescribing opioids or other narcotics.

As part of this enforcement action, the HHS Office of Inspector General (OIG) also commenced actions to exclude 295 physicians, nurses and other providers from Medicare and other federal health programs due to alleged opioid diversion and abuse. The OIG issued exclusion notices to 57 physicians, 162 nurses and 36 pharmacists. We understand that the 295 individuals and entities that received exclusion notices are in addition to the 412 criminally charged defendants, meaning that over 700 individuals or entities are included in this enforcement effort.

While individuals and entities are automatically excluded from participating in federal health care programs if convicted of Medicare or Medicaid fraud, among other reasons, the OIG also has so-called “permissive exclusion” authority to pursue exclusion against those it accuses of certain misconduct, such as submitting false claims or violating the Anti-Kickback Statute. When the OIG acts under its permissive exclusion authority, the defendant can contest the OIG’s actions before an Administrative Law Judge in an administrative trial, with rights of appeal to the HHS Department Appeals Board and then to federal court. An effort by the OIG to exclude 295 individuals as part of a single effort is a significant undertaking that will require a substantial commitment of the OIG’s enforcement resources, as well as the resources of the HHS Administrative Law Judge corps if defendants aggressively defend these actions.

Due to the wide discretion afforded physicians and other health care professionals, who often must make difficult decisions when caring for patients complaining of debilitating pain, both the DOJ in the criminal cases and the OIG in the administrative cases may have trouble proving the allegations when faced with a vigorous defense.

This is not the first massive health care fraud enforcement action led by the Medicare Fraud Strike Force. For example, in June 2016, a similar nationwide sweep resulted in criminal and civil charges against 301 individuals, including 61 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving a purported $900 million in supposed false billings.

In light of the renewed interest in the opioid epidemic and the government’s promise to continue to relentlessly investigate alleged health care fraud, we expect to see more matters like this arise in the foreseeable future. A new angle to this enforcement action is the OIG’s aggressive use of its permissive exclusion authority.

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About this Author

Jesse A. Witten, Partner, Litigation Attorney, Drinker Biddle

Jesse A. Witten is a partner in the firm's Litigation Group and is a member of the White Collar Criminal Defense & Corporate Investigations Team.  Before joining Drinker Biddle, he served as a Deputy Associate Attorney General in the United States Department of Justice where his duties included co-chairing the DOJ's health care fraud task force.  He also served as a Deputy Assistant Attorney General in the DOJ Environment and Natural Resources Division.  He previously was a partner with an international law firm.


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Barry Gross, Drinker Biddle, Federal prosecutor, White Collar Crime, Corporate

Barry Gross, a former federal prosecutor, is a partner in the firm's White Collar Crime and Corporate Investigations Practice Group. He specializes in the representation of professionals and business executives in investigations and trials. His practice includes the defense of white collar criminal investigations and prosecutions, internal corporate investigations, as well as complex civil litigation including civil Racketeer Influenced and Corrupt Organizations (RICO) cases and qui tam matters.

Barry has more than 30 years of experience conducting and handling investigations and high profile cases. He has participated in the defense of criminal and civil RICO cases, and cases involving allegations of securities fraud, mail fraud, wire fraud, bank fraud, tax fraud, health care fraud, and violations of the False Claim Act and Foreign Corrupt Practices Act (FCPA). In addition he has handled environmental matters, patent litigation, and bankruptcy litigation. Barry has tried more than 200 Federal and State jury trials to verdict and has handled numerous appeals, including arguments in the U.S. Court of Appeals and the Pennsylvania Supreme Court.