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Federal Healthcare Fraud Indictments in 2023

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2023 Medical Fraud Prosecutions

Medical fraud prosecutions follow investigative patterns.  We have been warning for years that telemarketing and DME fraud were focus items for the Department of Justice.  2023 proved us right.

2023 in general was a major year for healthcare fraud. In a two week period 78 people were arrested for health care fraud and opioid related charges. The arrests were made by federal agencies and by state law enforcement working with the Department of Justice. The DOJ claims that the total claimed fraud was over $2.5 billion.
The federal agencies involved included the FBI’s Criminal Investigative Division, the Department of Health and Human Services Office of the Inspector General (HHS-OIG), the Drug Enforcement Administration (DEA), the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) and other federal entities.

Telemarketing & DME Fraud

The first focus and one that we have been warning about and blogging about for years is Telemedicine Fraud. The U.S. Attorney in Southern Florida charged 11 individuals with over $ 2 billion in telemarketing fraud losses. The alleged schemes are always the same. Older people especially residents in assisted care are contacted by friendly people who put on seminars with free food, or entertainment (with free food) and simple demographic information is obtained.

Later forms requesting a physician sign off for orthotic braces, pain creams, skin creams, genetic testing, almost any DME supply are provided over the internet to doctors who review a form for 30 seconds (or less) and sign off on the DME equipment or testing. Medicare gets the bill.

More recently the operations have gotten “computerized”. The target group is still the elderly but also includes people who are disabled. They are contacted by direct mail, television advertisements, and other forms of advertising to induce them to contact the persons selling the DME items.

Doctors Were Targeted & Not the Offshore Companies

For years the doctors who signed off on the Rx’s were the main target. The government didn’t bother to go after the locums company(ies) that hired to doctors on behalf of the “marketing” companies. Many times the doctors simply do not understand the nature of what they are doing. They can be young physicians at their first job who look to supplement their income by doing work referred by a legitimate locums agency. Recently the Eastern District of Washington, charged a doctor for more than 2800 fraudulent orders for orthotic braces. The defense of true ignorance of the fraud was challenged by the government which claimed that he provided orthotics for patients whose limbs had already been amputated. As is standard in these arrests, the government claimed that the physician took less than 40 seconds to review and sign each order. Despite the grandiose nature of the charges, it is not a given that this doctor really understood the fraud. One would have to carefully review the records provided to him, his employment relationship with the locums that (we presume) hired him, e-mail exchanges and other factors. However, you can see how the doctor will be on the defensive (despite the “innocent until proven guilty” presumption).

Pharmaceutical Fraud

There has been an uptick in 2023 particularly with charges for pharmaceutical fraud. In a 2023 case a pharmaceutical wholesale distribution company was charged for $150 million in frauds. The claim is that the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The claim is that the drugs came from an illegal “buyback” scheme where HIV patients desperate for money sold their HIV medication for pennies on the dollar. The pills were then repackaged for resale.

Daniel Horowitz is a top criminal defense lawyer representing doctors in medical fraud and health care fraud cases.  Call Daniel at the earliest hint of a federal investigation.  Time is not your friend!