With Its Latest National Enforcement Initiative, DOJ Continues to Focus on Fraudulent Telemedicine Themes
On September 30, 2020, The Department of Justice (DOJ) announced the results of a sweeping joint healthcare fraud and opioid takedown that resulted in charges against 345 different defendants who were responsible for over $6 billion in government losses involving fraudulent healthcare services and improper billing. This was the largest healthcare fraud enforcement action in the history of the DOJ. Notably, over 100 doctors, nurses and other licensed medical professionals were among those charged.
The vast majority of those charged were involved in telemedicine schemes whereby beneficiaries were either mislead or tricked into a telemedicine consultation, usually over the phone, which then led to thousands of claims for unwanted or unnecessary durable medical equipment (DME) such as back, knee, or wrist braces. One defendant, a nurse practitioner from Georgia, was found to have signed orders for over $3 million in unnecessary DME in just 14 months.1 Another individual defendant in the Southern District of Georgia was charged with paying kickbacks to physicians for writing prescriptions for expensive compounded creams and laboratory testing.2
The U.S. Attorney’s Office for the Southern District of Georgia (SDGA), which is a comparatively small district, once again stood out as one of the more proactive DOJ units prosecuting healthcare fraud involving telemedicine. This enforcement trend will likely continue as the COVID-19 health crisis shifts traditional in-office visits to more virtual interactions between providers and patients.
In the past year, the SDGA has announced over 25 prosecutions arising out of “Operation Brace Yourself,” which uncovered an international telemedicine scheme that resulted in more than $1.5 billion in DME that was medically unnecessary or never delivered, but still billed to the federal government. Many of those defendants are awaiting sentencing or have already been sentenced. The current cases are just the latest in a long history of enforcement actions brought by the SDGA and predicated upon prior investigative work. Thus, as a result of those individuals and entities ensnared in the latest takedown, additional investigations of co-conspirators and others involved in similar schemes will likely occur. It is notable that most of the individuals were charged via information and not indictment possibly indicating a degree of cooperation between those charged and the government.
In addition, the recent DOJ announcement shows it has expanded its focus into new areas of fraud, such as substance abuse treatment facilities, which have seen millions and millions of dollars being poured into them as the nation continues to combat the problems associated with opioid addiction. The “sober home” facilities that were targeted appear to have engaged in various, complex kickback schemes whereby patients are illegally recruited and paid to be admitted to a facility and governmental programs like Medicare and Medicaid are then billed for unnecessary drug treatment and testing for those patients. Some of the patients were even found to have been repeatedly discharged and admitted to treatment facilities that were all involved and part of the same scheme. According to the DOJ, the “recycling” of these patients resulted in more than $845 million in false or fraudulent claims.
For questions or additional information about this legal update, please contact a member of the White Collar Defense and Healthcare practice group.
 United States v. Beaufils, 1:20-cr-00063-DHB-BKE (S.D. Ga. Sept. 2, 2020).