Department of Justice Announces $1.4 Billion in Alleged Losses Reported from the National Health Care Fraud Enforcement Action Charges

A press release made by the United States Department of Justice on September 17, 2021, revealed the results of the strategically coordinated, six-week-long, nationwide federal health care law enforcement action. Criminal charges against 138 defendants comprising of 42 doctors, nurses, and other licensed medical professionals have been filed in 31 federal districts across the United States to uncover various health care fraud schemes, which was reported to have accumulated to $1.4 billion in alleged losses.

Results of the 2021 National Health Care Fraud Enforcement Action

United States Department of Justice announced the results of the 2021 National Health Care Fraud Enforcement Action, wherein 138 individuals and entities, 42 of which are medical professionals sworn to help the sick, were charged for engaging in fraudulent schemes targeting various forms of federal health care programs. Approximately $1.4 billion in alleged losses have been recorded in this year’s nationwide federal health care law enforcement action. The criminal complaint against the defendants was filed under one of the five categories – telemedicine fraud cases, COVID-19 fraud cases, sober home cases, those involving the illegal prescription and distribution of opioids, and cases involving traditional health care fraud schemes. Among the noted categories, telemedicine cases brought about the largest fund misplacement, amounting to about $1.1 billion in losses due to fraud committed through the use of telecommunications technology. In addition to the aforementioned recorded loss from telemedicine cases, an estimated $133 million was said to have been illegally obtained through the defrauding of substance abuse treatment facilities or “sober homes,” about $29 million taken from COVID-19 health care programs, and approximately $160 million stolen through illegal prescription and distribution of opioids, among other federal health care programs. The 2021 National Law Enforcement Action was led by the United States Department of Justice – Health Care Fraud Unit, in collaboration with numerous federal and state law enforcement agencies, including a number of U.S. Attorney’s Offices, the FBI, HHS-OIG, and DEA.

Announcements in the 2021 National Law Enforcement Action

The 2021 National Law Enforcement Action involved filing criminal charges against individuals and entities that targeted various forms of federal health care programs or committed healthcare fraud. There were five classifications under which the enforcement action filed the criminal cases – the telemedicine fraud cases, the COVID-19 fraud cases, the sober home cases, those involving the illegal prescription and distribution of opioids, and cases involving traditional health care fraud schemes. A bulk of alleged losses came from telemedicine fraud cases, wherein approximately $1.1 billion have been quantified as losses due to fraud committed using telecommunications technology as the means to provide remote health care services. Apart from this, $29 million has been projected as amount stolen through COVID-19 health care fraud, $133 million allegedly taken via defrauding substance abuse treatment facilities or “sober homes,” and an estimated $160 million seized through scams involving other forms of federal health care programs and the illegal prescription and distribution of opioid.

Federal, State, and Local Government Agency Partners

Under the earnest leadership of the Health Care Fraud Unit of the U.S. Department of Justice – Criminal Division’s Fraud Section, different federal, state, and local government agencies have come to collaborate to investigate and prosecute those who have stolen from the nation’s federal health care programs. The Health Care Fraud Unit led the 2021 National Law Enforcement Action in conjunction with the division’s Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force Program. Among the core partners in this nationwide federal law enforcement action are a third of the list of active Offices of the United States Attorneys, along with the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA). Strategically coordinated as a part of the Justice Department’s ongoing efforts to alleviate and eliminate the devastating effects of health care fraud and the opioid epidemic in the nation’s communities, the cases are now being prosecuted by the Justice department’s Health Care Fraud and ARPO Strike Force Teams from the Criminal Division’s Fraud Section, in partnership with 31 U.S. Attorneys’ Offices across the nation, and several agents from the HHS-OIG, the FBI, the DEA, and from other federal and state law enforcement agencies.

Statement by Assistant Attorney General Kenneth A. Polite Jr. of the Criminal Division of the Department of Justice

Addressing potential scammers, Assistant Attorney General Kenneth A. Polite Jr. of the Criminal Division of the Department of Justice declared that the charges recently announced should serve as a notice – a clear message – that the Justice Department is consistent in its effort to ensure the safety of patients, as well as in its commitment to safeguarding the integrity of health care benefit programs despite the current global pandemic. Moreover, Assistant Attorney General Polite noted how the 2021 nationwide enforcement action demonstrates the duty of the Criminal Division in spearheading the combat against health care fraud, along with the nation’s battle against opioid abuse and traditional health care fraud schemes.

“This nationwide enforcement action demonstrates that the Criminal Division is at the forefront of the fight against health care fraud and opioid abuse by prosecuting those who have exploited health care benefit programs and their patients for personal gain. The charges announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a continued pandemic,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.

Statement by Assistant Director Calvin Shivers of the Federal Bureau of Investigation’s Criminal Investigative Division

Assistant Director Calvin Shivers of the Federal Bureau of Investigation’s Criminal Investigative Division delved into how health care fraud affects the whole of our health care system and takes advantage of the vulnerable in our communities while limiting our basic expectation of competent, available care. In line with this, Assistant Director Shivers asserted that the FBI would remain steadfast in its duty to safeguard American taxpayers and businesses from the excessive consequences of health care fraud to our nation in partnership with other law enforcement agencies.

“Health care fraud targets the vulnerable in our communities, our health care system, and our basic expectation of competent, available care. Despite a continued pandemic, the FBI and our law enforcement partners remain dedicated to safeguarding American taxpayers and businesses from the steep cost of health care fraud,” said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division.

Statement by Deputy Inspector General for Investigations Gary L. Cantrell of the Department of Health and Human Services – Office of the Inspector General

A warning to prospective scammers, Deputy Inspector General for Investigations Gary L. Cantrell of the Department of Health and Human Services – Office of the Inspector General (HHS-OIG) confidently claimed that the announcement of the charges under the 2021 National Law Enforcement Action should not be taken lightly as the HHS-OIG, with the aid of its law enforcement partners, is relentless in its commitment to combating fraud, and holding those who lead and participate in illicit activity accountable. Moreover, Deputy Inspector General for Investigations Cantrell remarked on the number of criminals engaging in health care fraud and how the Department of Health and Human Services will continuously improve its services to protect the taxpayers’ money, as well as the millions of beneficiaries who rely on federal health care programs.

“We have seen all too often criminals who engage in health care fraud — stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries. Today’s announcement should serve as another warning to individuals who may be considering engaging in such illicit activity: our agency and its law enforcement partners remain unrelenting in our commitment to rooting out fraud, holding bad actors accountable, and protecting the millions of beneficiaries who rely on federal health care programs,” said Deputy Inspector General for Investigations Gary L. Cantrell of HHS-OIG.

Statement by Administrator Anne Milgram of the United States Drug Enforcement Administration

Administrator Anne Milgram of the United States Drug Enforcement Administration asserted that the DEA prioritizes the apprehension of those individuals who engage in health care fraud and diversion of prescription drugs as these criminals target the most vulnerable people in the community. Administrator Milgram further detailed that the fraudulent activities that take advantage of those in pain, are homeless, or battling substance addiction do not simply profit from desperation but also place their victims at a more profound disadvantage, leaving them with almost nothing. DEA Administrator Milgram also expressed her gratitude towards their law enforcement partners, who consistently provide assistance as the Drug Enforcement Administration makes every effort to keep the communities safer and healthier through the prevention and alleviation of misuse and over-prescription of controlled medications.

“Holding to account those responsible for health care fraud and diversion of prescription drugs is a priority for DEA. These fraudulent activities prey on our most vulnerable – those in pain, the substance-addicted, and even the homeless – those who are most susceptible to promises of relief, recovery, or a new start. Not only do these schemes profit from desperation, but they often leave their victims even deeper in addiction. We are grateful to our partners who stand with us to keep our communities safer and healthier through our collective efforts to prevent the misuse and over-prescribing of controlled medications,” said U.S. DEA Administrator Anne Milgram.

Statement by Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-Lasure

The Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-Lasure contends that every dollar saved in all the federal health care programs is essential in the sustainability of these programs, particularly that of the Medicare programs. According to Administrator Brooks-Lasure, these initiatives are meant to fulfill the needs of seniors and people with disabilities, and the CMS has taken action against the liable individuals to preserve the integrity of the Medicare Advantage Programs and protect the Medicare Trust Fund. CMS Administrator Brooks-Lasure also acknowledged the vital contribution of the Department of Justice and the U.S. Department of Health and Human Services – Office of the Inspector General in the Centers for Medicare & Medicaid Services’ effort to combat fraud, along with waste and abuse, in the nation’s federal programs.

“Every dollar saved is critical to the sustainability of our Medicare programs and meeting the needs of seniors and people with disabilities. CMS has taken actions against 28 providers on behalf of people with Medicare coverage and protects the Medicare Trust Fund. Actions like this to combat fraud, waste, and abuse in our federal programs would not be possible without the successful partnership of Centers for Medicare & Medicaid Services, the Department of Justice and the U.S. Department of Health and Human Services, Office of Inspector General,” said Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure.

Telemedicine Fraud Cases

In this year’s National Health Care Fraud Enforcement Action, the majority of the alleged fraud loss, along with the most significant number of criminal defendants noted in the announcement, stemmed from fraudulent schemes involving telemedicine. Over $1.1 billion in allegedly false claims related to the use of telecommunications technology as the method of carrying out deception and embezzlement in providing remote health care services were charged against 43 criminal defendants in 11 judicial districts.

Court documents revealed telemedicine executives among the defendants who have allegedly partnered with doctors and nurse practitioners to execute its telemedicine fraud. The team of medical professionals, under the leadership of telemedicine executives, were said to have ordered unnecessary durable medical equipment, genetic and other diagnostic testing instruments, and pain medications, despite not having enough interaction or having minimal interaction through a brief telephonic conversation with the patients to warrant a proper diagnosis. Succeeding the submission of purchase orders by the medical practitioners, durable medical equipment companies, and pharmacies make the purchases to receive illegal kickbacks and bribes, which would come from the $1.1 billion in false and fraudulent claims to Medicare and other government insurers for health care. According to the court documents, there were several instances in which medical practitioners billed Medicare for telehealth consultations that did not occur as represented. Through the series of submissions of fabricated documents and applications, the defendants were able to receive a substantial amount of proceeds that were then used to purchase luxury items, such as real estate, vehicles, and yachts.

The success of the nationwide coordinating role of the National Rapid Response Strike Force of the U.S. Department of Justice – Fraud Section has allowed the continued focus on investigating and prosecuting health care fraud schemes involving telemedicine. The creation of the National Rapid Response Strike Force was announced in the 2020 National Health Care Fraud and Opioid Takedown. Since then, the National Rapid Response Strike Force has provided much-needed assistance in the coordinating process of the prosecution of the telemedicine initiative Sober Homes initiatives and COVID-19 related fraud cases in this year’s enforcement action. In addition to the formation of the National Rapid Response Strike Force, the success of the 2021 National Law Enforcement Action, especially in its focus on telemedicine fraud, may be attributed to the efficiency of the telemedicine component of last year’s national takedown, in addition to the impact of the 2019 “Operation Brace Yourself” Telemedicine and Durable Medical Equipment Takedown, which resulted in an estimated cost avoidance of over $1.9 billion in the amount paid by Medicare for orthotic braces in the 20 months following the 2019 takedown.

COVID-19 Fraud Cases

Out of the 138 defendants indicted in the 2021 National Health Care Fraud Enforcement Action, nine were reported to have been involved in various fraudulent schemes designed to take advantage of the current global pandemic. They, therefore, targeted federal health care programs that are meant to cater to the COVID-19 pandemic. The nine defendants allegedly submitted erroneous applications and documents that ultimately resulted in over $29 million in false billings. Among the schemes noted in the enforcement action include the exploitation of policies established by the Centers for Medicare & Medicaid Services to enable increased access to care during the COVID-19 pandemic, such as expanded telehealth regulations and rules. Apart from this, it was noted in the nationwide law enforcement action that the defendants allegedly misused patient information to inflate claims to Medicare over unrelated, medically unnecessary, expensive laboratory tests and genetic testing. On top of the nine aforementioned defendants, five were charged over wrongful use of the monies received from the Provider Relief Fund – a program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Through the COVID-19 Health Care Fraud Takedown that happened on May 26, the 2021 National Law Enforcement Action was able to build upon its success and coordinate a law enforcement action against 14 defendants in seven judicial districts, enabling the possible retrieval of $128 million in false billings. The COVID-19 cases announced as a part of the 2021 National Law Enforcement Action were made in collaboration with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which has been presided over by the National Rapid Response Strike Force.

Sober Homes Cases

More than $133 million in deceptive and false claims for tests and treatments supposedly made towards the vulnerable patients seeking treatment for drug and/or alcohol addiction were noted in the 2021 National Law Enforcement Action. Cases were filed against individuals and entities that engaged in schemes that subjected substance abuse patients to unnecessary drug testing, billing for therapy sessions that were often not provided, and referring them to substance abuse treatment facilities to submit millions of dollars of false and fraudulent claims to receive monetary kickbacks.

With the continued effort of the National Rapid Response Strike Force and the Health Care Fraud Unit’s Los Angeles Strike Force, more than $133 million in false and fraudulent claims over sober home cases were filed in the 2021 National Law Enforcement Action.

Cases Involving the Illegal Prescription and/or Distribution of Opioids
Prior to the 2021 National Health Care Fraud Enforcement Action, the Health Care Fraud Strike Force has maintained 15 strike forces operating in 24 districts since its inception in March 2007. As a result, more than 4,600 defendants have been indicted for the collective billing of approximately $23 billion in fraudulent claims over the Medicare program.

In this year’s nationwide law enforcement action, 19 defendants have been charged for illegal prescription and/or distribution of opioids. Included in the list were medical professionals and several other individuals who have allegedly prescribed more than 12 million doses of opioids, among other prescription narcotics, in which case, have accumulated to over $14 million in false billings.

Cases Involving Traditional Health Care Fraud Schemes

In relation to more traditional categories of health care fraud, 60 defendants have been indicted in the 2021 National Law Enforcement Action. These individuals have allegedly participated in fraudulent schemes that resulted in the submission of over $145 million in false claims of health care that were excessive and medically unnecessary or were often not supplied to Medicare, Medicaid, TRICARE, and private insurance companies.

Administrative Actions

On top of the criminal actions announced in the 2021 National Health Care Fraud Enforcement Action, 28 administrative actions to proactive combat fraudulent providers were announced by the CMS and the HHS-OIG.

The criminal complaints filed are merely allegations and should not be considered as evidence of guilt. All defendants named and indicted in the 2021 National Law Enforcement Action shall be entitled to a fair trial and be presumed innocent until proven guilty beyond a reasonable doubt in the court of law.

You may access the remarks of Assistant Attorney General Polite on https://www.justice.gov/opa/video/assistant-attorney-general-kenneth-polite-jr-delivers-remarks-health-care-enforcement