The Justice Department levied criminal charges against hundreds of doctors, nurse practitioners, pharmacists, and other licensed medical professionals in 50 federal districts and 12 state attorneys general’s offices across the United States for their alleged participation in various health care fraud schemes totaling $14.6 billion.
The record-breaking takedown involved federal and state law enforcement agencies across the country and represents an unprecedented effort to combat health care fraud schemes that exploit patients and taxpayers, the Department of Justice said in the June 30 announcement.
As part of the coordinated enforcement effort, the government said it seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets. In a related matter, the Centers for Medicare & Medicaid Services said it prevented over $4 billion from being paid in response to the false and fraudulent claims and that it suspended or revoked the billing privileges of 205 providers in the months leading up to the takedown.
In addition, the DOJ announced that civil charges were brought against 20 defendants for $14.2 million in alleged fraud, as well as civil settlements with 106 defendants totaling $34.3 million.
The effort was led and coordinated by the health care fraud unit of the DOJ Criminal Division’s Fraud Section and its core partners from U.S. Attorneys’ Offices, the Department of Health and Human Services Office of Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), and the Drug Enforcement Administration (DEA). The cases were investigated by agents from HHS-OIG, FBI, DEA, and other federal and state law enforcement agencies. The cases are being prosecuted by Health Care Fraud Strike Force teams from the Criminal Division’s Fraud Section, 50 U.S. Attorneys’ Offices nationwide, and 12 State Attorneys General Offices.
“This record-setting health care fraud takedown delivers justice to criminal actors who prey upon our most vulnerable citizens and steal from hardworking American taxpayers,” said Attorney General Pamela Bondi in the announcement. “Make no mistake—this administration will not tolerate criminals who line their pockets with taxpayer dollars while endangering the health and safety of our communities.”
The charges involve:
Transnational criminal organizations: The DOJ charged 29 defendants for their roles in submitting over $12 billion in fraudulent claims to America’s health insurance programs.
In one instance, the Justice Department’s Operation Gold Rush resulted in the largest loss amount ever charged in a DOJ health care fraud case. The organization allegedly used a network of foreign straw owners, including individuals sent into the United States from abroad, who, acting at the direction of others using encrypted messaging and assumed identities from overseas, strategically bought dozens of medical supply companies located across the United States. They then rapidly submitted $10.6 billion in fraudulent health care claims to Medicare for urinary catheters and other durable medical equipment by exploiting the stolen identities of over one million Americans spanning all 50 states and using their confidential medical information to submit the fraudulent claims.
The Health Care Fraud Unit’s Data Analytics Team and its partners detected the suspicious billing through proactive data analytics, and HHS-OIG and CMS successfully prevented the organization from receiving all but approximately $41 million of the approximately $4.45 billion that was scheduled to be paid by Medicare. HHS and CMS intend to seek to return the $4.41 billion in escrow to the Medicare trust fund for needed medical care.
The scheme resulted in payments of approximately $900 million from Medicare supplemental insurers. To date, law enforcement has seized approximately $27.7 million in fraud proceeds as part of Operation Gold Rush.
Fraudulent wound care: Seven people, including five medical professionals, were charged in connection with approximately $1.1 billion in fraudulent claims to Medicare and other health care benefit programs for amniotic wound allografts. The DOJ claims defendants targeted vulnerable elderly patients, many of whom were receiving hospice care, and applied medically unnecessary amniotic allografts to these patients’ wounds. Many of the allografts allegedly were applied without coordination with the patients’ treating physicians, without proper treatment for infection, to superficial wounds that did not need this treatment, and to areas that far exceeded the size of the wound. Certain defendants allegedly received millions in illegal kickbacks from the fraudulent billing scheme.
Prescription opioid trafficking: Seventy-four defendants, including 44 licensed medical professionals, were charged across 58 cases in connection with the alleged illegal diversion of over 15 million pills of prescription opioids and other controlled substances. For example, the DOJ said five defendants associated with one Texas pharmacy were charged with the unlawful distribution of over three million opioid pills. The defendants allegedly conspired to distribute massive quantities of oxycodone, hydrocodone, and carisoprodol, which were subsequently trafficked by street-level drug dealers, generating large profits for the defendants.
In a related matter, the DEA announced in the last six months it charged 93 administrative cases seeking the revocation of pharmacies, medical practitioners, and companies authority to handle and/or prescribe controlled substances.
Telemedicine and genetic testing fraud: The DOJ said 49 defendants were charged in connection with the submission of over $1.17 billion in allegedly fraudulent claims to Medicare resulting from telemedicine and genetic testing fraud schemes. For example, in the Southern District of Florida, prosecutors charged an owner of telemedicine and durable medical equipment companies with a $46 million scheme in which Medicare beneficiaries were allegedly targeted through deceptive telemarketing campaigns and then fraudulent claims were submitted to Medicare for durable medical equipment and genetic tests for these beneficiaries. The DOJ said it continues to focus on eliminating health care fraud schemes that depend on telemedicine, including schemes involving fraudulent claims for genetic testing, durable medical equipment, and COVID-19 tests.
Other health care fraud schemes: The other cases charge an additional 170 defendants with various other health care fraud schemes involving over $1.84 billion in allegedly false and fraudulent claims to Medicare, Medicaid, and private insurance companies for diagnostic testing, medical visits, and treatments that were medically unnecessary, provided in connection with kickbacks and bribes, or never provided at all. For example, in the Western District of Tennessee, prosecutors charged three defendants, including business owners and a pharmacist, with a $28.7 million scheme to defraud the Federal Employees’ Compensation Fund by allegedly billing for medications for injured United States Postal Service employees that were never prescribed by a licensed practitioner and largely were not dispensed as claimed. And in the Western District of Washington and the Northern District of California, prosecutors charged medical providers with allegedly stealing fentanyl and hydrocodone, respectively, that was meant for the providers’ patients, including child patients in need of anesthesia.