Federal government’s annual health care fraud takedown

Every year around this time, the Department of Justice and the Department of Health and Human Services Office of Inspector General announce the results of their national health care fraud takedown. This year was the largest to date -- resulting in charges against 601 individuals across 58 federal districts responsible for over $2 billion in fraud losses. This represents a 45 percent increase from the 412 individuals charged in last year's sweep and a 53 percent increase from last year's loss amount of $1.3 billion.

This cross-division takedown involved the efforts of numerous investigative and enforcement agencies. As in years past, the schemes charged target those submitting fraudulent billing to Medicare, Medicaid, TRICARE and private insurance companies for medically unnecessary prescription drugs and compounded medications. Though this year, with Attorney General Jeff Sessions at the helm, the emphasis of the takedown was on the medical professionals who are seen as having contributed to the opioid epidemic by prescribing medically unnecessary drugs and compound medications and by, according to the Department of Justice, unlawfully distributing opioids and other prescription narcotics.

More specifically, of the 601 defendants charged, 165 were medical professionals -- including 32 doctors were charged for their alleged roles in prescribing and distributing opioids and other narcotics. Since last year's health care fraud takedown, the Office of Inspector General has also issued 587 exclusion notices to individuals and entities whose conduct has allegedly contributed to opioid diversion and abuse. These notices bar participation in, or submitting claims to, all federal health care programs, including Medicare and Medicaid. Sixty-seven doctors, 402 nurses and 40 pharmacy services were among those who received these exclusion notices.

In years past, the takedown sweeps focused on the marketers in an attempt to curtail the rampant insurance fraud, largely orchestrated through the use of kickbacks. However, the recent takedowns demonstrate the government's shift in focus to those individuals who actually control the system -- the licensed professionals and pharmacies. With last year's focus on the compound pharmacies, this year's takedown has expanded in scope to include not only the compounding pharmacies, but the doctors and surgeons themselves. As Attorney General Sessions said, "This is the most fraud, the most defendants, and the most doctors ever charged in a single operation." This focal shift seeks a larger objective beyond the prosecution of suspected corrupt medical professionals and aims towards global deterrence and an inability to use a medical license to take advantage of the insurance system.

In the Central District of California, the majority of defendants charged were surgeons, compound pharmacists, and medical professionals who provide home health services, Medicare Part D prescription drugs and hospice care. Following the larger focus on the opioid crisis, the Central District has also indicted doctors, narcotics traffickers and other unidentified coconspirators who are allegedly responsible for contributing to the epidemic through narcotics trafficking in which illegal opioid and other drug prescriptions were sold for cash and the drugs were then sold on the black market.

As in years past, seven of the Central District cases announced last week were filed by DOJ attorneys working in conjunction with the Medicare Fraud Strike Force. Established in 2007, this multi-investigative-agency Strike Force has been tasked with preventing and combating health care fraud, waste and abuse. It claims responsibility for the indictment of 2,498 individuals and criminal actions against 1,938 individuals who collectively falsely billed the Medicare program over $3 trillion.

In addition to the Strike Force, the enforcement actions include cases and investigations brought through the execution of search warrants and other traditional investigative techniques.

The specific allegations against medical professionals tend to focus on illegal remunerations for health care referrals in violation of the Anti-Kickback Statute, conspiracy to solicit, receive, and pay illegal remuneration for health care referrals, false claims in violation of the False Claims Act, money laundering, wire and mail fraud, aggravated identity theft, and improper auto-refill programs.

In addition to the criminal charges recently filed, federal authorities have also announced their aggressive pursuit of civil remedies to recover the allegedly fraudulently obtained health care program funds. They are also seeking the suspension and/or exclusion of these providers and medical professionals from participating in federal health care programs. As the recent takedown demonstrates, the licensed medical professionals will continue to be the focus of further investigations and subsequent takedowns.