Medicare fraud takedown: A closer look

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

As the saying goes, “The more things change, the more they stay the same.”

While the recent nationwide Medicare takedown with charges against 243 people throughout the country garnered lots of headlines — which is, of course, part of the government’s enforcement strategy — a closer look at the types of alleged health care fraud cases packaged together under one umbrella shows mostly the same types of garden-variety health care fraud cases that the government has been prosecuting for years.

Marilyn May

These types of alleged schemes are not new

According to remarks by Attorney General Loretta Lynch, the charges include allegations that defendants “billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.”

Cases in which defendants allegedly did not provide services or equipment and then billed the government as if they had, however, are the simplest health care fraud cases to prove and the government has been doing that for years.

Although prosecutions for provision of care that was not needed are more complex than simply proving that services were not rendered at all, the government has successfully prosecuted a number of such cases in the past: for example, in a 2014 takedown, a number of criminal prosecutions were based on alleged unnecessary cardiac surgeries, allegations that a physician was paid “to sign off on home health care services that were not necessary and often never provided,” allegations that “the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided,” or allegations that the defendants “recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.”

Collaborative effort effective

The government’s simultaneous announcement of charges against large numbers of individual defendants for alleged criminal Medicare fraud is also nothing new. The Medicare Fraud Strike Force has been coordinating large numbers of simultaneous criminal health care fraud charges for years. Operating in Miami since 2007, then expanding to Chicago, Dallas, Los Angeles, Detroit, Houston, Baton Rouge, Brooklyn and Tampa, the U.S. Department of Justice (DOJ) has worked with its partners at the U.S. Department of Health and Human Services (HHS), the Federal Bureau of Investigation (FBI) and local enforcement agencies to coordinate criminal health care fraud cases and used large-scale coordinated timing of criminal charges since the inception of the Strike Force, albeit with smaller numbers of people charged at a time. For example, last year’s Medicare fraud takedown included charges against 90 people and, according to HHS, was the seventh such national large-scale charging of defendants for alleged Medicare fraud.

Types of cases

According to an Office of Inspector General (OIG) fact sheet, this year’s announcement included cases primarily focused on fraud in three areas: Medicare home health services, Medicaid Personal Care Services and Medicare Part D prescription drugs. Previous enforcement efforts, however, have included charges for alleged Medicare home health services fraud. For example, DOJ’s 2013 Medicare fraud takedown announcement included statements such as these:

“In one case, three defendants were charged for participating in a $20 million home health fraud scheme involving a home health agency.”

“Court documents allege that the defendants bribed Medicare beneficiaries for their Medicare information, which was used to bill for home health services that were not rendered or that were not medically necessary.”

“Five individuals were charged…, including two doctors, in New Orleans by the Baton Rouge Strike force for participating in a different $51 million home health fraud scheme.”

Similarly, the government has also targeted Medicaid personal services fraud in the past. Examples include last year’s arrest of 20 people and the HHS-OIG 2012 report on Personal Care Services referencing prosecutions for personal services fraud.

New focus on Medicare Part D fraud

So what is new about this year’s announcement? Unlike previous years’ announcements, this year, the government focused attention on Medicare Part D fraud. Attorney General Lynch’s statement that the takedown represented the “first large-scale effort to focus on Medicare Part D fraud,” coupled with the HHS-OIG’s fact sheet that states, “Approximately one-third of the investigations focus on prescription drug fraud schemes, including billing for drugs not dispensed, illegal dispensing of expired and adulterated drugs, drug trafficking, doctor shopping and diversion for recreational and other illegitimate use,” demonstrates that the government has turned its enforcement attention to a program that costs more than $121 billion dollars a year.

HHS-OIG quickly followed up on the Medicare fraud takedown announcement emphasizing Medicare Part D fraud with two additional reports on the subject: “Ensuring the Integrity of Medicare Part D” and “Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D.”

Such long overdue attention provides a wakeup call for anyone attempting to defraud the Medicare Part D program who might have assumed that such conduct presented a low risk, which at most, might result in civil enforcement rather than criminal prosecution.

Marilyn May, counsel at Arnold & Porter LLP, can be reached at

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