The COVID-19 Fraud Enforcement Task Force was established in May 2021 to utilize the resources of the U.S. Department of Justice (DOJ) and various governmental agencies to combat COVID-19-related fraud. These efforts have led to investigations and prosecutions involving Paycheck Protection Program (PPP) fraud as well as healthcare-related COVID-19 fraud, the extent, and implications of which is only now becoming clear.
The DOJ is looking to cast a wide net around what it sees as healthcare-related COVID-19 fraud. Kevin Chambers, Director for COVID-19 enforcement for the DOJ, has described such coordinated efforts as “extraordinary” with the purpose being “to prosecute some of the largest and most-wide ranging pandemic frauds detected to date.”
At this writing, nearly two dozen defendants from across the U.S. have been charged for their alleged participation in such schemes. Federal law enforcement agencies that are involved include the Federal Bureau of Investigations, Department of Homeland Security; Department of Health and Human Services Office of the Inspector General, Food and Drug Administration Office of Criminal Investigations; and the Postal Inspection Service.
The subjects and targets of healthcare-related COVID-19 fraud cases vary from alleged bogus telemedicine encounters, to falsifying COVID-19 vaccination cards, to misuse of relief funds – and from medical professionals to manufacturers and distributors, respectively. In Florida, a medical professional was charged with healthcare fraud for allegedly billing bogus telemedicine encounters that did not legitimately occur during the pandemic. In California, a pharmacy director was accused of using actual vaccine lot numbers to falsify COVID-19 vaccination cards. Here in New Jersey, a postal service employee was charged with conspiracy for allegedly participating in a scheme to distribute fraudulent COVID-19 vaccination record cards to unvaccinated people. In Pennsylvania, an individual was charged with knowingly creating and possessing an unauthorized COVID-19 vaccination card, which bore an official government insignia.
Charges have also been brought against individuals for misappropriating the CARES Act Provider Relief Fund (PRF) monies meant to reimburse eligible medical providers for increased costs or lost revenue caused by the COVID-19 pandemic. An individual in California who owned and operated healthcare and hospice companies pleaded guilty to theft of government property because of his misuse of PRF monies, misappropriating nearly $200,000 worth of allocated PRF monies for personal use rather than for its intended purpose – to ensure continued relief and access to medical care. Moreover, the Center for Program Integrity, as a part of the Centers for Medicare & Medicaid Services has taken corresponding administrative actions against medical providers accused of such alleged wrongdoings.
It may become challenging for the government to discern between PPP loan borrowers that intended and affirmatively acted to commit fraud and those that were well-intentioned but nonetheless failed to comply with this fast-tracked federal relief program. As a result, many unwitting borrowers may find themselves caught in the DOJ’s fishnet of fraud charges. It is therefore critical for healthcare entities that received PPP funds to immediately review their compliance, mitigate any non-compliance, and address corrective measures and exposure to enforcement with the appropriate government agency. Moreover, healthcare providers, owners and executives of medical businesses, physicians, and healthcare marketers and manufacturers should keep careful track of their billing practices, including billing for telemedicine, and institute safeguards to ensure COVID-19 relief funds are not being intentionally or negligently misused.