2021 National Health Care Fraud Enforcement Action

District Summaries

Among the cases charged as part of the 2021 National Enforcement Action are:

Cases Charged in Health Care Fraud and ARPO Strike Force Locations

The National Rapid Response Strike Force, in partnership with other Strike Forces and U.S. Attorneys’ Offices, charged thirteen defendants who allegedly billed more than $550 million in false and fraudulent claims.[1]  National Rapid Response Strike Force prosecutors brought prosecutions in districts across the country, including the prosecution of an owner of telemedicine companies and call centers alleged to have defrauded Medicare of more than $784 million ($352 million in newly alleged loss), the prosecution of two sober homes defendants for over $128 million in fraud, and the prosecution of numerous Provider Relief Fund fraud cases. 

In the Southern and Middle Districts of Florida, forty-nine defendants were charged across two judicial districts for their roles in schemes to defraud insurance programs out of more than $184 million. Several defendants were part of telemarketing companies who targeted Medicare beneficiaries with marketing campaigns designed to convince the beneficiaries to accept expensive medical equipment and lab rests without regard to medical necessity.  For example, one indictment in a DME telemarketing fraud case alleges that the owner of four DME companies paid telemarketers to call beneficiaries and convince them to accept orthotic braces, regardless of medical need.  The DME owner and the telemarketers paid telemedicine companies for doctors’ orders authorizing the expensive braces.  The DME owner allegedly billed approximately $31 million in fraudulent claims to Medicare, of which $15.6 million was paid, for the braces. 

In the Eastern District of Michigan, thirteen defendants were charged for their roles in schemes to defraud insurance programs out of more than $16.5 million.  For example, in one indictment, one defendant purchased a home health agency in Michigan and submitted thousands of claims for services not provided and along with two other defendants opened more than a dozen shell corporations and associated bank accounts used to launder the proceeds of the fraud resulting in a loss amount of approximately $7.4 million.

In the Northern District of Texas, six defendants were charged for their roles in schemes to defraud insurance programs out of more than $163 million.  For example, one indictment in a telemedicine case alleges a physician was paid kickbacks in exchange for ordering orthotic braces and genetic testing without ever speaking to the patients and without any regard for whether the patient needed the items or testing.  Once the orders were filled, members of the conspiracy submitted approximately $41 million in fraudulent claims to federal, state, and private insurers for braces and genetic testing. 

In the Gulf Coast Strike Force, six defendants were charged across three judicial districts, including the Eastern and Middle Districts of Louisiana and the Western District of Tennessee, for their roles in schemes including the unlawful distribution of opioids, the payment of kickbacks for laboratory testing services, and the fraudulent submission of claims to Medicare, Medicaid, and other insurers for DME, behavioral health services, and dispensing of foot bath medications.  In total, the defendants allegedly caused the submission of over $20 million in false and fraudulent claims to Medicare, Medicaid, and other insurers.  For example, in one indictment, the defendant, a medical doctor, allegedly unlawfully distributed over 1.2 million doses of Schedule II controlled substances outside the usual course of professional practice and without a legitimate medical purpose and caused the submission of over $5 million in fraudulent claims to Medicare, Medicaid, and other insurers.  In another indictment, the defendant, a podiatrist, allegedly routinely prescribed expensive foot bath medications through his podiatry practice that were not medically necessary in order to bill Medicare and Medicaid, through in-house pharmacies that he owned, for the dispensing of these medications, causing over $3 million in reimbursements. 

In the Central District of California, five defendants were charged for their roles in health care fraud and opioid distribution schemes. For example, in one indictment, a defendant was charged for his role in a scheme to distribute controlled substances, including opioids. The indictment alleges that the defendant illegally distributed controlled substances by writing prescriptions for oxycodone, hydrocodone, alprazolam, promethazine, and codeine without legitimate medical purposes.

In the District of New Jersey, four defendants were charged for their roles in schemes to defraud Medicare by allegedly billing for medically unnecessary durable medical equipment as well as to unlawfully distribute opioids.  In one case, an advanced practice nurse allegedly wrote opioid prescriptions contingent on individuals agreeing to return a portion of the pills to her after the prescription was filled.  The nurse allegedly issued such prescriptions to multiple patients between January 2017 and January 2019.

In the Northern District of Illinois, four defendants were charged for their roles in opioid distribution and COVID 19 fraud schemes. For example, in one case, a doctor unlawfully pre-signed prescriptions for Schedule II controlled substances and his employee unlawfully dispensed the prescriptions. One of these defendants was charged with allegedly diverting approximately $57 million worth of prescription drugs to pharmacies and wholesalers by misrepresenting that the prescription drugs had remained in a regulated distribution chain, knowing the drugs had been diverted from the chain.

In the Appalachian Regional Prescription Opioid (ARPO) Strike Force – North Region, which operates in the Southern District of Ohio, the Eastern District of Kentucky, the Southern District of West Virginia and the Western District of Virginia, four defendants were charged for their roles in health care fraud schemes related to urine drug testing, and opioid distribution.

In the Eastern District of New York, three defendants were charged with conspiracy to commit health care fraud and opioid distribution.  Two of the defendants are alleged to have caused claims to be submitted to various insurance companies when, in reality, the claims were ineligible for reimbursement because the claimed services had not been rendered as billed or were rendered in connection with kickbacks.  The total loss amount for both defendants is approximately $5,400,000.  In another indictment, the defendant, a dentist, was charged with illegally prescribing oxycodone and alprazolam to drug-addicted victims in exchange for sexual acts.  The victims were not the defendant’s patients, and the prescriptions were not for legitimate medical purposes.  The six victims identified in the indictment received the illegally prescribed narcotics from October 2016 to August 2020.

In the Eastern District of Pennsylvania, one defendant was charged for his role in a scheme to defraud Medicare by billing for medically unnecessary cancer genetic testing. The defendant was a marketer who recruited individuals for cancer genetic testing in exchange for kickbacks and bribes.

Cases Brought Across the Country by U.S. Attorneys’ Offices

The 2021 National Enforcement Action included cases brought by U.S. Attorney’s Offices not located in Strike Force districts.

In the District of Arizona, two defendants were charged for their roles in a scheme to defraud the Arizona Healthcare Cost Containment System (“AHCCS”) out of $1.2 million. AHCCCS is primarily federally funded, and it provides healthcare programs for Arizona’s low-income residents. The defendants are alleged to have used their billing company to submit $1.2 million in fraudulent bills to AHCCCS over a 9-month period in 2019-2020, and then to have used some of the proceeds to purchase a $1.3 residence in Gilbert, Arizona. The indictment also alleges the defendants lied in applications for COVID-19 pandemic-related loans and used the proceeds of the loan funds for personal expenses, such as the purchase of a residence in Mexico, where one of the defendants is a citizen.

In the Northern District of California, three defendants were charged by information for their roles in a scheme to defraud Medicare through fraudulent home health care claims. The informations alleged that the defendants fraudulently used the names of licensed medical practitioners on medical records and billing information without the practitioners’ knowledge or consent and submitted the documentation to Medicare in support of false claims. The defendants also misrepresented the credentials of nursing staff and had the staff perform nursing services they were ineligible to perform.

In the Southern District of California, four defendants were charged in schemes to defraud health care benefit programs of over $129 million. Two defendants were alleged to have carried out a scheme to defraud Medicare through the submission of false and fraudulent claims for durable medical equipment which were induced through a system of illegal kickbacks through four DME companies they owned.  Medicare paid the defendants’ companies more than $69 million on the fraudulent claims. Another defendant pleaded guilty in the Northern District of Georgia to having been involved in that same multi-million-dollar DME scheme.

In the Eastern District of California, one defendant, an optometrist, fraudulently billed Medicare for optometry services not provided. The defendant billed over $1 million and received over $700,000 in payments from Medicare from these false and fraudulent claims. The fraudulent claims included claims for performing ultrasounds and for placing amniotic membranes on patients’ eyes despite the fact that the defendant did not perform these procedures.

In the Southern District of Georgia, six defendants were charged for their roles in a scheme to defraud Medicare out of more than $52 million.  In one case, the defendants allegedly ran marketing campaigns designed to convince Medicare beneficiaries to accept expensive cancer genetic screening, or “CGx,” tests, regardless of medical need.  Once the beneficiary agreed to accept the test, the defendants purchased doctors’ orders authorizing the tests from a telemedicine company.  The two defendants then sold the beneficiary information and doctor’s orders to the lab willing to pay them the most money for the referrals and used sham contracts and invoices to conceal the illegal kickbacks.  In total, the labs billed Medicare $45 million, of which $6.8 million was paid, for the tests.

In the Northern District of Georgia, two defendants were charged for their roles in a scheme to steal more than $12 million.  In one case, the defendant was indicted for defrauding personal protective equipment (“PPE”) purchasers out of more than $12 million during the COVID-19 pandemic, money which the defendant then allegedly used to fund his own lifestyle, including by purchasing a multi-million-dollar waterfront mansion.

In the District of Kansas, two defendants were charged for their involvement in a scheme to obtain hydrocodone by completing and presenting paper prescriptions to local pharmacies in the names of one of the defendants and third parties that each defendant knew.  One defendant was a physician’s assistant (PA) at the time who used a pad of prescription forms from an assisted living facility that was no longer in business.  The PA completed the prescriptions using his signature, DEA registration number, while some of these prescriptions also displayed the forged signature of a doctor for whom the PA previously worked.  The prescriptions were presented at area pharmacies and the co-defendant would pay for the hydrocodone at the time they received the medication.

In the District of Massachusetts, two defendants and a spinal device manufacturing company were charged for their roles in a scheme to offer and pay kickbacks to spine surgeons to induce and reward usage of the spinal device company’s equipment in medical procedures.  The CEO, a physician, and the CFO were charged for their roles.  In addition, the indictment alleges a money laundering conspiracy was intended to conceal the bribe payments and launder the proceeds.  A surgeon and a distributor have each pleaded guilty in the District of Massachusetts to their roles in the kickback scheme and are cooperating with the government. 

In the Eastern District of Missouri, three defendants, including two doctors and the owner of a home health care company, were charged for their roles in three separate schemes that resulted in insurance programs paying out over $28 million based on fraudulent telemedicine orders for DME, genetic cancer tests, and topical creams; non-rendered in-home services; and medically unnecessary controlled substance medications. 

In the Western District of North Carolina, one defendant, an operator of mentoring programs for at-risk youths, was charged for his alleged role in an illegal kickback scheme that defrauded the North Carolina Medicaid program of more than $4 million. The defendant allegedly conspired with laboratories that performed the drug testing of urine specimen collected from children enrolled at the aftercare programs – who were also Medicaid beneficiaries – and received over $1.5 million in illegal kickbacks once the laboratories were reimbursed by Medicaid.  In addition to the kickbacks, the laboratories also allegedly used beneficiaries’ information to file fraudulent claims for unauthorized and medically unnecessary drug tests.  In another indictment, one defendant, an ophthalmologist, was charged with receiving and distributing foreign market prescription drugs which were not approved for use in the United States.  The doctor allegedly administered these drugs to his mostly Medicare insured patients even though they were misbranded and not approved by the FDA.  However, the doctor’s clinic billed Medicare as if the drugs were FDA approved and pocketed the substantial savings from his purchase of unapproved prescription drugs.

In the District of Rhode Island, one defendant, a registered nurse practitioner, allegedly billed and received more than $2.3 million dollars from commercial health insurers and Medicaid for services that the defendant falsely claimed to have performed on patients in Rhode Island, New York, and Florida.  The defendant routinely submitted claims for health insurance payments for in-person patient services he claimed to have performed in East Greenwich, New York, and Florida, but that investigators determined were at times the defendant was actually in another state or out of the country. In other instances, the defendant allegedly billed insurance companies and Medicare for services he claimed to have provided to patients who themselves were out of state or out of the country at the time.

In the Western District of Texas, two defendants were charged with a single count of conspiracy to commit health care fraud and fourteen counts of health care fraud based on the defendants’ scheme to enroll elderly individuals in hospice care who had no terminal diagnosis and did not need hospice care.  To facilitate the scheme, the defendants created false medical records, forged the signatures of medical personnel, and fraudulently billed Medicare.  It is estimated that the defendants overbilled Medicare in excess of $4 million.  Another defendant was also charged with paying illegal remunerations regarding a federal health care program.  This defendant directed the payment of referral fees to several recipients for referrals of hospice patients to her company that did not qualify for hospice care. 

In the Eastern District of Texas, four defendants were charged with conspiracy to commit illegal remunerations and with substantive counts of illegal remunerations. The conspirators obtained patient information, including protected health information and personally identifiable information, and used the information to create fictitious physicians’ orders.  The conspirators then sold the physicians’ orders to each other and to other durable medical equipment providers.  Within approximately eight months, the defendants collectively obtained more than $2.9 million in proceeds from the criminal scheme.

In the Northern District of West Virginia, one defendant, a billing manager of a health care company, was charged with wire fraud, money laundering, and theft from a health care benefit program for stealing over $100,000, by processing unauthorized payments from her employer, her employer’s patients, and insurance companies to Square, Inc., accounts she fraudulently registered in her employer’s name, but that were controlled by the defendant and linked to her personal banking accounts.

*********

[1] One defendant was charged jointly with the Gulf Coast Strike Force and also is referenced in that paragraph.