Department of Justice continues to target COVID-19 fraud | Epstein Becker & Green


On April 20, 2022, the United States Department of Justice (“DOJ”) announced a Nationally Coordinated Policing Action to Combat COVID-19 Health Care Fraud. Consistent with the announcement, the federal government has continued throughout this year to focus its enforcement on fraud in the COVID-19 space, particularly the misuse of provider relief funds and testing fraud. COVID-19.

In addition to the DOJ, the Small Business Association (“SBA”) and the U.S. Department of Health and Human Services (“HHS”) have also confirmed their focus on PPP fraud and COVID-19 testing fraud. Inspector General Hannibal “Mike” Ware of the Office of Inspector General (OIG) of the SBA stated that “[t]he Paycheck Protection Program is intended to provide a lifeline to the nation’s small businesses and its employees. The OIG will aggressively investigate allegations of wrongdoing in SBA’s pandemic response programs. In the same way, Inspector General Christi A. Grimm of HHS-OIG said “[t]Attempts to profit from the COVID-19 pandemic by targeting recipients and stealing federal health care programs are unconscionable. . . HHS-OIG is proud to work alongside our law enforcement partners at the federal and state levels to ensure that bad actors who commit serious and harmful crimes are held accountable.

In a recent example of law enforcement in this space, in early April, Physician Partners of America LLC (“PPOA”) (a Florida entity), its founder and former chief medical officer, agreed to pay 24.5 million to resolve allegations that he violated the False Claims Act by making, in part, a misrepresentation in connection with a loan obtained through the Paycheck Protection Program (“PPP”) of the Small Business Administration (“SBA”) (Press release). A number of PPOA-affiliated entities were also held jointly and severally liable for the settlement amount, including Florida Pain Relief Group, Texas Pain Relief Group, Physician Partners of America CRNA Holdings LLC, Medical Tox Labs LLC, and Medical DNA Labs LLC.

The government alleged that the PPOA engaged in overcharging for unnecessary services, including submitting claims for medically unnecessary urine drug tests (“UDTs”) and forcing physician employees to order multiple testing at the same time without determining whether testing was reasonable and necessary, or even reviewing the results of initial testing (presumptive UDT) to determine whether further testing (definitive UDT) was warranted. Additionally, the government alleged that in response to Florida’s suspension of all non-emergency medical procedures due to the COVID-19 pandemic, the PPOA compensated for lost revenue by requiring its employed physicians to schedule appointments. unnecessary evaluation and management (“E/M”) appointments. with patients every 14 days (as opposed to the PPOA’s previous one-month standard) and instructed his physicians to bill these E/M visits using inappropriate high-level procedure codes.

In connection with the above overcharging, in order to obtain a PPP loan from the SBA, the government claimed that the PPOA had falsely stated to the SBA that it was not engaged in such illegal activity in order to securing $5.9 million in PPP funding.

PPOA has also entered into a five-year Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General of the US Department of Health and Human Services (HHS-OIG). As part of the CIA, the PPOA agreed to undertake significant compliance efforts, including: maintaining a compliance department, medical director, and oversight board; retain the services of a compliance expert; provide management certifications; maintain written standards, training and education; obtain several annual claims reviews by an independent review body; establishing a risk assessment and internal review process; and implementing testing referral tracking.

Similarly, in January 2022, a Florida man pleaded guilty today in the Southern District of Florida to a $6.9 million conspiracy to defraud Medicare by paying bribes and bribes to get medically unnecessary lab tests from doctors that were then billed to Medicare (Press release). The government alleged that the defendant exploited the COVID-19 pandemic by bundling COVID-19 testing with other forms of testing that patients did not need, including genetic testing and testing for pathogens. rare respiratory.

Defendant, owner of Boca Toxicology LLC (dba Lab Dynamics), allegedly exploited patient fears of COVID-19 by bundling COVID-19 tests with more expensive and medically unnecessary tests, including tests for respiratory pathogen panel and sometimes genetic testing for cardiovascular disease, cancer, diabetes, obesity, Parkinson’s disease, Alzheimer’s disease and dementia. In total, the defendant caused his lab to submit more than $6.9 million in false and fraudulent claims to Medicare for these medically unnecessary tests.

The accused pleaded guilty to one count of conspiracy to commit health care fraud. He was sentenced to 78 months in prison on March 30, 2022.

It is clear that the government’s focus on law enforcement remains focused on fraud in the COVID-19 space, with violators subject to severe civil and criminal consequences. Indeed, on July 20, 2022, the United States Department of Justice charges announced against 36 accused of $1.2 billion in health care fraud related to the “payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the direction of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies”. Recipients of COVID-19 relief funds and/or those involved in the COVID-19 testing space should ensure that their processes comply with the Stark Act and the Misrepresentation Act, as well as the anti-kickback law (“AKS”), Eliminating Kickbacks in Recover Act (“EKRA”), and any other applicable state law.

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