New Fraud Takedown Shows that Coordinated Enforcement Remains Alive & Well under Trump

Last year at this time, the Justice Department announced the results of a nationwide takedown involving “the most defendants charged and largest alleged loss amount in Medicare Strike Force history.” And while the administration has changed, the story hasn’t. The new takedown results the DOJ announced on July 13 not only breaks but pulverizes the previous record set in 2016.

Targeted Transgressions
Most of the takedown allegations were against providers of home health, mental health, physical/occupational therapy, durable medical equipment and prescription drug-related services. The DOJ report cites only one case specifically involving labs—an alleged fraudulent lab testing scheme involving 10 individuals in Missiouri.

But while not specifically targeting labs, the takedown focuses on violations that have been associated with labs, including submitting claims for services that weren’t medically necessary or even performed, paying kickbacks for beneficiary information used for making false claims and allowing nonqualified individuals to perform services billed to Medicare, Medicaid and TRICARE. Another common pattern: charges against medical professionals for the unlawful distribution of opioids and other prescription narcotics.

Local Results
Here’s a rundown of key results from different Strike Force locations participating in the takedown:

• Southern District of Florida: Total of 77 defendants charged for $141 million in false billings for home health care, mental health services, pharmacy and other services, including over $58 million for drug treatment services;

• Middle District of Florida: 10 individuals charged with participating in schemes involving almost $14 million in fraudulent billing;

• Eastern District of Michigan: 32 defendants charged for fraud, kickback, money laundering and drug diversion schemes involving approximately $218 million in false claims for services that were medically unnecessary or never provided;

• Southern District of Texas: 26 individuals charged in cases involving over $66 million, including a physician and clinic owner indicted for illegally distributing controlled substances and three substantive counts of distribution of controlled substances from a purported pain management clinic claimed to be the highest prescribing hydrocodone clinic in Houston;

• Central District of California: 17 defendants charged in alleged schemes to defraud Medicare out of approximately $147 million;

• Northern District of Illinois: 15 individuals charged in six different schemes concerning home health care services and physical therapy fraud, kickbacks, and mail and wire fraud allegedly involving over $12.7 million in false billing;

• Eastern District of New York: 10 individuals charged with participating in schemes involving over $151 million in fraudulent billing, roughly $100 million of which involved payment of illegal kickbacks by five health care professionals in exchange for patient referrals to their own clinics.

In addition to the state Strike Force locations, 31 U.S. Attorney’s Offices from across the country participated in the takedown, including Alabama (Northern and Southern Districts), Arkansas (Eastern District), California (Northern and Southern), Connecticut, Georgia (Northern and Southern), Illinois (Southern), Indiana (Northern and Southern), Iowa (Southern), Kentucky (Western), Maine, Missouri (Eastern and Western), Nebraska, Nevada, New York (Northern, Southern and Western), Ohio (Southern), Tennessee (Eastern), Texas (Eastern, Northern and Western), Utah, Virginia (Eastern) and Puerto Rico.

Takeaway: Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants for over $12.5 billion worth in false billings to Medicare, Medicaid and TRICARE. The latest takedown is also an unambiguous signal that the new administration will continue and even step up coordinated federal and state government enforcement activity.