In a continuation of its annual rite, the Department of Justice (“DOJ”) on July 20, 2022, announced healthcare-related criminal charges against 36 defendants in 13 federal districts around the U.S. The charges allege more than $1.2 billion in alleged healthcare fraud. At the same time and as part of this coordinated effort, the Centers for Medicare and Medicaid Services (“CMS”), Center for Program Integrity (“CPI”) took administrative actions against 52 healthcare providers involved in similar schemes. This year’s announcement focused on telemedicine, cardiovascular and genetic testing, and durable medical equipment (“DME”) schemes.
Much of the announced charges related to violations of the Anti-Kickback Statute (“AKS”), which, among other things, prohibits payments in exchange for receiving referrals for healthcare services paid by government programs (e.g., Medicare and Medicaid). AKS investigations have long been a focus of the DOJ, both in criminal matters and in civil False Claims Act investigations. The recently alleged schemes involve payments by laboratory owners and operators in exchange for the referral of patients for testing services from medical professionals working with fraudulent telemedicine and digital medical technology companies.
As is often the case in these investigations, the government alleges that medical professionals ordered genetic tests and DME regardless of medical necessity and that much of the DME was never provided to the patients. Additionally, the government alleges that some of the defendants allegedly controlled an international telemarketing network that lured thousands of elderly and disabled patients into the scheme by using deceptive techniques to induce them to agree to unnecessary genetic testing and durable medical equipment.
In its press release announcing this year’s coordinated enforcement action, the DOJ notes that this action builds on prior telemedicine enforcement actions involving more than $8 billion in fraud. Indeed, telemedicine schemes accounted for more than $1 billion of the total alleged intended losses associated with the criminal charges recently announced. The increased legitimate use of telemedicine, particularly since the onset of the COVID-19 pandemic, has also led to potential increased abuses and fraud. As such, it is not only a current focus of DOJ enforcement actions, but likely to remain one for the foreseeable future. Accordingly, it is imperative for healthcare providers who use telemedicine as part of their practices to review and ensure that their policies and procedures are both current and followed as part of a robust compliance program. A failure to do so could lead to government scrutiny and investigation.