Background
The Department of Justice announced the largest scale coordinated law enforcement action targeting COVID-19 healthcare fraud in the United States.1
Eighteen defendants were criminally charged in nine federal district courts due to an alleged $490 million in COVID-19 false billings or theft from federally funded programs. This enforcement action piggybacks on the success of the prior May 2021 and April 2022 COVID-19 Enforcement Actions. The charges announced showcase enforcement agencies' commitment to ensuring that COVID-19 healthcare fraud does not go unpunished.
The announcement included the following charges:
- Multiple related to defrauding the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program.
- First-of-their kind charges against suppliers of over-the-counter COVID-19 tests.
- Charges for the submission of false/fraudulent claims for laboratory testing.
- Charges brought under the Provider Relief Fund (PRF) Initiative.
- Charges against manufacturers/distributors of fake COVID-19 vaccination record cards.
To date, the Health Care Fraud Strike Force (a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services), aiming to prevent and deter healthcare fraud and enforce current anti-fraud laws, has charged 53 defendants in nationwide COVID-19 Health Care Fraud Enforcement Actions causing over $784 million in losses associated with the pandemic.
Implications for Healthcare Organizations
The charges announced, along with past and future charges, are representative of the current regulatory focus and potential risk areas to healthcare organizations. Many healthcare organizations accessed funding from the HRSA COVID-19 Uninsured Program and PRF. These programs have significant compliance considerations tied to the receipt and use of the funds. Most of the support programs, waivers, and flexibilities that organizations have relied upon during the COVID-19 Public Health Emergency (PHE) will terminate with the end of the PHE, set to expire on May 11, 2023. Therefore, a new set of organizational risks emerge in failing to appropriately deconstruct processes that were built to comply with the waivers permitted during the PHE. Inaction is not a possible risk strategy in the coming months. Organizations must take affirmative steps to appropriately review and unwind their processes that they have operationalized due to the PHE. Organizations must consider these risks in their compliance and enterprise-wide risk assessment. The regulatory focus and severity of the risks warrant a coordinated effort to ensure compliance moving forward. For organizations that have utilized any COVID-19 waivers or flexibilities, it is a necessity to have COVID-19 compliance activities as part of your organizational work plan.
Footnote
1. Department of Justice, "Justice Department Announces Nationwide Coordinated Law Enforcement Action to Combat COVID-19 Health Care Fraud" (April 20, 2023), https://www.justice.gov/opa/pr/justice-department-announces-nationwide-coordinated-law-enforcement-action-combat-covid-19.
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