By Jarrad Wright
In this time of crisis, the federal government, state government and private industry are working on multiple fronts to respond to COVID-19 and to provide essential medical equipment and services to hospitals and those in need. While the pandemic has brought out the best in the vast majority of people, there will always be some that will see the crisis as an opportunity to profit at the expense of others. At present the Department of Justice’s focus has been on responding to the immediate need to prevent hoarding of medical supplies and price gauging. However, in the weeks and months ahead the focus is likely to shift to those that are violating the healthcare statutes through overbilling or fraudulent billing related to COVID-19. This is particularly true if the federal government begins reimbursing or paying the medical expenses of everyone not insured by COVID-19, as the administration has implied.
In recent years, the Justice Department has spent significant resources prosecuting healthcare fraud cases against physicians, hospitals, and the general public related to fraudulent healthcare claims. For example, in December 2019, the District of Kentucky charged ten former National Football League players for allegedly submitting false claims for reimbursement for false medical expenses to the NFL’s health reimbursement account. Similarly, prosecutors have charged a number of doctors and hospitals in recent years with a variety of fraudulent schemes including receiving kickbacks for prescribed medicines, prescribing medicines that were not needed in order to receive increased disbursements, and submitting claims under improper billing codes to increase payments. There are significant criminal and civil penalties at issue in such cases.
On the civil side, the False Claims Act is the primary statute used to collect monies from those that defraud the federal government. Under the Act, persons are liable if they submit a false claim for payment to the federal government and this includes government run or supported healthcare programs such as Medicare, Medicaid and Tricare. The consequences of the False Claims Act are significant and includes paying treble the amount of the government’s damages plus thousands of dollars of penalties per claim. Under the False Claims Act, those who submit fraudulent claims to the government are subject to a civil penalty of between $5,000 and $10,000 for each claim. However, because the Act allows for inflationary adjustments, as of 2016, violators now face penalties of between $10,781.40 and $21,562.80 per claim. Because the penalties are assessed per claim, a scheme over even a short period of time can amount to enormous sums of monies. This is on top of having to pay the governments’ costs for bringing the suit, and for healthcare providers, losing the ability to care for patients on government insurance programs.
On the criminal side, there are a wide variety of criminal healthcare statutes that can apply including the anti-kickback statute, general healthcare fraud laws, wire fraud, and money laundering. The Department of Justice has expended significant resources in recent years in having teams of prosecutors and F.B.I. agents specialize in such cases. The criminal penalties range from reimbursing loses to lengthy prison sentences and criminal forfeitures.
Once the immediate crisis subsides, it is likely that the government’s focus will shift back to whether or not it has been defrauded. DiMuroGinsberg has years of experience involving complex criminal and civil litigation. This includes defending people accused of healthcare fraud and pursuing False Claims Act cases. DiMuroGinsberg stands ready to assist whether one is accused or aware of such fraudulent claims.