Lowering the Boom on COVID-19 Relief Scammers

On April 20, the U.S. Department of Justice (DOJ) announced that it has charged 21 defendants in nine different US districts for allegedly carrying out COVID-19 scams worth just a hair under $150 million. Medical testing labs were among those caught up in the in operation, aka, 2022 National COVID-19 Health Care Fraud Enforcement Action. The scams followed two basic patterns: false billing of Medicare for medically unnecessary COVID-19-related services, and pocketing of pandemic relief money.

Patient ID and Test Sample Scams

In several cases, defendants allegedly offered COVID-19 testing to get patients to provide a blood or saliva sample and personal identifying information, which they then used to bill Medicare for unrelated, more expensive tests in violation of the False Claims Act. One of the larger schemes took place in central California where a pair of lab owners allegedly billed Medicare for over $125 million in medically unnecessary COVID-19 and respiratory pathogen tests. They then sought to launder their ill-gotten gains through shell corporations in the US, transferred to foreign countries and then used to purchase luxury items and real estate. There were also cases in Maryland and New York where owners of medical clinics are accused of improperly obtaining confidential information from patients seeking COVID-19 testing at drive-thru sites and then using the information to bill Medicare for long office visits with those particular patients.

Medicare Waiver Scams

The other common COVID-19 fraud pattern involved labs and other providers seeking to take advantage of the Medicare waivers and relaxation of regulatory rules that the U.S. Department of Health & Human Services (HHS) put in place early in the public health emergency in the interest of expanding access to care. Not surprisingly, several of these schemes involved telemedicine. For example, a Florida medical professional has been charged for alleged fraudulent billing for telemedicine encounters that never took place and paying kickbacks in the form of providing access to telehealth patients to get providers to order unnecessary genetic tests.

Takeaway

None of this comes as any surprise. The DOJ and Office of Inspector General (OIG) have been warning the public and providers about COVID-19 scams almost from the moment the waivers were issued and the federal relief money began being distributed. Nor is this the first DOJ COVID-19 fraud enforcement. In May 2021, the agency completed a COVID-19 Enforcement Action charging 14 defendants for over $143 million in false billing and COVID-19 relief scams. Last month, President Biden named associate deputy general Kevin Chambers to serve as special prosecutor in charge of leading the DOJ’s COVID-19 fraud enforcement actions.