DOJ charges telehealth executives, doctors with exploiting COVID-19 to rake up $143M in fraud

The Department of Justice (DOJ) charged 14 people, including telehealth executives and physicians, for alleged healthcare fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.

The 14 defendants, including 11 newly charged defendants and three who were charged in superseding indictments, across seven federal districts are accused of creating fraudulent schemes to victimize beneficiaries and steal from federal healthcare programs, according to a DOJ press release.

The defendants charged in the cases include marketers, medical business owners, physicians and telemedicine company executives.

Among the allegations, the DOJ charges that multiple defendants offered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-thru COVID-19 testing sites and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample.

The defendants then allegedly misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary and far more expensive laboratory tests, including cancer genetic testing, allergy testing and respiratory pathogen panel tests.

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In some cases, the COVID-19 test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy and respiratory pathogen testing was medically unnecessary, the DOJ alleges.  

The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.

"The multiple health care fraud schemes charged today describe theft from American taxpayers through the exploitation of the national emergency,” said Deputy Attorney General Lisa Monaco in a statement. “These medical professionals, corporate executives, and others allegedly took advantage of the COVID-19 pandemic to line their own pockets instead of providing needed health care services during this unprecedented time in our country."

Additionally, the Center for Program Integrity at the Centers for Medicare & Medicaid Services (CMS) separately announced today that it took adverse administrative actions against over 50 medical providers for their involvement in healthcare fraud schemes relating to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.

Some defendants were charged with telehealth fraud by taking advantage of CMS policies that broadened telehealth access during the pandemic so Medicare beneficiaries could receive healthcare services from their doctors without having to travel to a medical facility.

"The cases announced today include first in the nation charges for allegedly exploiting these expanded policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that did not occur. As part of these cases, medical professionals are alleged to have offered and paid bribes in exchange for the medical professionals’ referral of medically unnecessary testing," DOJ officials said in the press release.

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The changes announced Wednesday represent the third set of criminal charges related to the misuse of Provider Relief Fund monies. The Provider Relief Fund is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 to provide needed medical care to Americans suffering from COVID-19.

The coordinated law enforcement efforts included the National Rapid Response Strike Force of the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with the Health Care Fraud Unit’s Medicare Fraud Strike Forces (MFSF) and the U.S. attorneys’ offices for the Northern District of California, the Western District of Arkansas and the Middle District of Louisiana.

The MFSF is a partnership among the Criminal Division, U.S. attorneys’ offices, the FBI and the Department of Health and Human Services' Office of Inspector General.

Since its inception in March 2007, the MFSF has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.