DOJ Targets COVID Related Fraud

On March 10, 2022, the Department of Justice ("DOJ") appointed a Director for COVID-19 Fraud Enforcement.[1] As a part of this announcement, DOJ announced some of its priorities in Health Care Fraud enforcement. The priorities focus on kickbacks, utilizing the relaxed rules to bill for medically unnecessary or never performed services, vaccine-related fraud, and fraud related to accessing COVID relief funds.

As a part of this enforcement priority, on April 20, 2022, DOJ announced 21 indictments related to approximately $150 million dollars in alleged COVID-19 fraud.[2] The nature of these cases run the gamut of health care fraud allegations. Here are some of the prominent cases being pursued:

Anti-Kickback Violations

The largest case, involving approximately $144 million in alleged fraudulent billing, was related to a laboratory allegedly paying kickbacks to marketers who obtained specimens and orders from providers that were then billed to federal health care programs. In addition, one of the laboratory owners had been excluded for decades and thus could not be an owner of an entity that billed federal health care programs.

In another case, a defendant is accused of paying kickbacks to marketers to solicit orders for durable medical equipment that patients did not want or need.

Medically Unnecessary Testing

Several cases involved providers taking advantage of the relaxed COVID-19 rules. These rules were designed to increase medical access to patients during the public health emergency. Still, some providers would abuse these rules by ordering and billing for medically unnecessary testing, services, and supplies that were never performed. In some instances, defendants utilized the relaxed telehealth rules to pay kickbacks in the form of "sham" telehealth consulting fees to induce referrals for services and equipment.

In one case, a physician obtained patient information by performing COVID testing on the patient. The physician allegedly used that information to bill for office visits that were not performed.

Vaccine Related Fraud

An interesting, yet concerning, area of fraud that has developed is related to COVID vaccinations. Some defendants have been distributing fraudulent vaccinations and/or fraudulent vaccination cards.

Several defendants are accused of providing "homeoprophylaxis immunizations" and then filling out COVID vaccination cards as if the patient received an approved vaccination or treatment. Such homeoprophylaxis immunizations are not FDA-approved, and it was inappropriate to list these immunizations on the vaccination cards.

In other cases, defendants were alleged to have forged vaccination cards for individuals. In one case, the defendant had access to actual vaccination lot numbers and allegedly filled out vaccination cards for patients with this information without providing the essential vaccinations. In other cases, the forged cards were simply false records. Some reportedly did this with an intent to undermine CDC efforts, while others were allegedly motivated by profit.

COVID Relief Fraud

The final area of alleged fraud related to providers who file fraudulent applications for Provider Relief Funds and/or falsely testified as to the use of the funds. Most of the allegations indicate that rather than returning the funds the providers were not entitled to, the funds were instead diverted to providers for personal use.

As the public health emergency (hopefully) ends, DOJ will likely continue to ramp up its efforts to investigate cases against providers and others that took advantage of the COVID emergency to make a profit or for other inappropriate purposes. Expect to see headlines like this for some time to come.