US Launches Nationwide Coordinated Law Enforcement Action to Combat Health Care-Related COVID-19 Fraud

By Marissa Koblitz Kingman

As part of its ongoing effort to crack down on health care-related COVID-19 fraud, the U.S. Justice Department has launched a nationwide coordinated law enforcement action that recently led to criminal charges against 21 defendants in nine federal districts across the United States.

Officials said the defendants participated in various health care fraud schemes that exploited the COVID-19 pandemic. The cases allegedly resulted in over $149 million in false billings to federal programs and theft from federally funded pandemic assistance programs. The department seized over $8 million in cash from the alleged fraudulent schemes.

For health care businesses that used these federal pandemic aid programs, this latest enforcement action demonstrates that an audit or investigation may be inevitable. Therefore, it is essential to ensure that compliance protocols are in place to avoid criminal consequences.

The CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020, provided emergency financial assistance through the Paycheck Protection Program (PPP) in the form of forgivable loans to businesses to cover payroll and other specified expenses. It also included the Provider Relief Fund, which provided needed medical care to Americans suffering from COVID-19.

From the outset, the government vowed to ensure that it would take measures to prevent recipients from fraudulently taking advantage of the CARES Act programs.

Focus on Fraud in Health Care Sector

The Justice Department has been focused on COVID-19 health care fraud since the pandemic’s inception. Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division recently stated that the “Department of Justice’s Health Care Fraud Unit and our partners are dedicated to rooting out schemes that have exploited the pandemic.” U.S. Attorney Philip R. Sellinger, from the District of New Jersey, vowed to “continue to bring cases to fight this kind of fraud.” The Director of the COVID-19 Fraud Enforcement team, Kevin Chambers, said that these recent COVID-19 health care fraud prosecutions are some “of the largest and most wide-ranging pandemic frauds detected to date.”

The recent charges included claims of illegal kickbacks and bribes for laboratory tests for COVID-19, Medicare billing for alleged COVID-19 diagnostic testing, and concealing kickback payments through shell companies. The charges also related to fraud in connection with identification documents related to COVID-19 vaccination record cards.

What to Expect Next

The federal government’s continued focus on COVID-19 fraud in the health care sector signals that all such professionals and business owners who have benefited from the government aid programs should proceed with caution. Any health care business owner who is concerned about compliance with the CARES Act or potential fraud exposure should consult counsel. Do not wait to be contacted by law enforcement.

Those who have already received a subpoena or inquiry from a law enforcement agency should immediately consult with counsel who can assess the full potential for civil and criminal exposure prior to responding, even if it’s alleged by the government that you are only a third-party witness. The continued aggressive prosecutions that could lead to harsh prison sentences demonstrate that individuals and businesses must proceed with caution when navigating potential fraud issues related to COVID-19 aid. Any communications with the government that contain any inaccurate information, even if seemingly innocent, could lead to very serious criminal charges.