On April 20, 2022, the Department of Justice (DOJ) announced a nationwide coordinated enforcement action targeting COVID-19-related fraud involving charges against 21 individuals across nine federal districts, and over $149 million in alleged false claims submitted to federal programs.[1]
This marks the first significant DOJ enforcement action since Attorney General Merrick Garland named Associate Deputy Attorney General Kevin Chambers as the Director for COVID-19 Fraud Enforcement on March 10, an appointment President Biden previewed in his State of the Union address on March 1.
DOJ’s enforcement action covers a broad range of alleged schemes, including misappropriation of Provider Relief Fund (PRF) payments for personal use, manufacture and distribution of fake COVID-19 vaccination record cards, and billing for health care services that were either unnecessary or never provided. A major area of reported enforcement involves clinical laboratories, with enforcement in that sector accounting for at least $125 million of the total $149 million in alleged false billings reported in connection with DOJ’s national takedown. Specific allegations involve, among other things, kickbacks, money laundering, unnecessary or excessive laboratory testing, and schemes where confidential patient information was obtained from drive-thru testing sites and then used in connection with false claims for complex in-office patient visits that never occurred. DOJ has issued a detailed summary of the charges referenced in the April 20 announcement, available here.
Beyond criminal enforcement, the Centers for Medicare & Medicaid Services also announced that it has taken an additional 28 administrative actions against health care providers for “alleged involvement in fraud, waste, and abuse schemes related to the delivery of care for COVID-19, as well as schemes that capitalize upon the public health emergency.”[2]
In a prior COVID-19 enforcement announcement from May 2021, where clinical laboratories were also touted as a top enforcement priority, DOJ reported similar criminal charges against 14 individuals, filed in seven federal districts across the United States, and involving over $143 million in alleged false claims submitted to federal programs, just slightly below the numbers that DOJ announced on April 20.[3] Our prior coverage of DOJ’s May 2021 announcement is available here.
In a trend that we anticipate will continue, DOJ’s recent enforcement announcement demonstrates an unwavering commitment to prosecution of COVID-19-related fraud while signaling that enforcement in connection with PRF payments and clinical laboratories remain top priorities. Given the amount of scrutiny the health care sector is under with respect to COVID-19-related issues, and the anticipated wave of enforcement and audit activity, it is imperative that health care providers and regulated entities are proactive in ensuring (and documenting) ongoing compliance with applicable federal and state laws and regulations, as well as the terms and conditions governing the receipt and use of pandemic relief payments, including those distributed from the PRF.
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[1] See Department of Justice, “Justice Department Announces Nationwide Coordinated Law Enforcement Action to Combat Health Care-Related COVID-19 Fraud,” April 20, 2022, available at https://www.justice.gov/opa/pr/justice-department-announces-nationwide-coordinated-law-enforcement-action-combat-health-care.
[2] See id.
[3] See Department of Justice, “DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19,” May 26, 2021, available at https://www.justice.gov/opa/pr/doj-announces-coordinated-law-enforcement-action-combat-health-care-fraud-related-covid-19.
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