The Department of Justice ("DOJ") recently had its biggest healthcare fraud takedown in history against defendants for participation in schemes involving over $14.6 billion in losses to the Government. DOJ charged 324 defendants, which included doctors, nurse practitioners, pharmacists, and other medical professionals, in connection with the various schemes. Acting Inspector General Juliet T. Hoghkins of the Department of Health and Human Services Office of Inspector General reported that it was a takedown of unprecedented scale, covering a wide range of misconduct that included transnational healthcare fraud, fraudulent wound care, opioid trafficking, and fraudulent telemedicine practices.
Transnational Medicare Fraud Involved Stolen Identities and AI Voice Cloning
Among the schemes, 29 people were charged for taking part in transnational criminal organizations. One of the investigations was titled "Operation Gold Rush" and targeted a network of individuals who were sent into the United States from abroad to purchase medical supplies companies. The companies utilized the stolen identities and medical information of over one million Americans to submit fraudulent Medicare claims for equipment such as urinary catheters.
A similar scheme was operated in Illinois. There, defendants secured Medicare beneficiaries' identification numbers and health information. They used artificial intelligence to produce falsified recordings of the supposed beneficiaries consenting to receive various medical products. The beneficiaries' information was sold to laboratories and durable medical equipment companies so that these companies could submit Medicare claims on their behalf for products and services that they had not requested nor received. Several of the defendants were based overseas and were laundering the proceeds of this fraudulent scheme to offshore accounts.
A defendant from Pakistan and the United Arab Emirates conspired with an addiction treatment facility to bill Medicaid for services that were never provided or were far below medical standards. Further, the treatment center owners paid illegal kickbacks in exchange for patient referrals from the homeless population and Native American reservations. Ultimately, this scheme resulted in approximately $650 million in false claims billed to Arizona Medicaid.
Unnecessary Wound Grafts Lead to $1.1 Billion in Medicare Fraud
Charges were filed against seven other defendants for submitting fraudulent Medicare claims for amniotic wound grafts. The defendants targeted elderly patients, and applied amniotic allografts to small surface level wounds that did not require such treatment. Many of these allografts were done without coordinating with the patient's treating physician, and they ultimately resulted in $1.1 billion in fraudulent claims to Medicare and other Government healthcare programs.
Prescription opioid trafficking was also a focus of the takedown, with 74 defendants being charged for diverting over 15 million pills of prescription opioids and other controlled substances to street-level drug dealers in exchange for large profits. Just one Texas pharmacy was allegedly responsible for the unlawful distribution of over 3 million opioid pills.
Finally, 49 defendants were charged with submitting fraudulent Medicare claims in connection with fraudulent telemedicine and genetic testing schemes. The defendants targeted Medicare beneficiaries through telemarketing campaigns in order get them to agree to receive unnecessary medical equipment and genetic testing. They would then submit Medicare claims for these services, resulting in over $1.17 billion in submitted claims.
How Can Whistleblowers Protect Against Healthcare Fraud?
Whistleblowers, often former employees, are able to come forward with new information that indicates an organization is partaking in fraudulent activities. The False Claims Act allows individuals to seek counsel and pursue a case against a healthcare or pharmaceutical company that is suspected of being engaged in healthcare fraud. Once a claim has been filed, the Government determines whether it wants to pursue the case. Whether or not the Government chooses to pursue the claim, a whistleblower can choose to move forward.
The Government does not have the capacity or resources to pursue every case of healthcare fraud, which makes whistleblowers key in discovering and prosecuting such fraud. Healthcare fraud is exceptionally difficult to detect without whistleblowers who have insider information on healthcare and pharmaceutical companies.
Ultimately, whistleblowers are crucial to protect taxpayer dollars and patients from ill-intended healthcare companies. If funds are recovered through a lawsuit an individual filed as a whistleblower under the False Claims Act, the whistleblower can receive a financial reward ranging from 15% to 30% of the total recovery.
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