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Health Care Fraud Enforcement Got You Worried?

healthcare fraud in 2020By: Karen Davila

Healthcare fraud continues to be a significant priority for the U.S. Department of Justice.  On February 24, 2021, the DOJ’s Criminal Division Fraud Section published its annual “Fraud Section Year in Review 2020.”  While the Fraud Section has three separate enforcement units, the Health Care Fraud (HCF) Unit is responsible for all enforcement activities in the health care industry.  The Unit’s focus is to protect against fraud and abuse in federal health care programs and recoup illicit gains.

During 2020, the HCF Unit operated 15 strike forces in 24 federal judicial districts throughout the U.S.  The efforts of these strike forces led to charges against 167 individuals alleging $3.77 billion in fraudulent charges for health care paid for by federal and state programs.  This should cause any health care provider to stand up and take notice.  And enforcement in the health care industry is not likely to go away soon with so many schemes ripe for the government’s picking and generating recoupment on behalf of the federal health care programs.

Here are couple of the latest schemes that have landed pharmacies, pharmacists and other health care professionals squarely in the crosshairs of federal enforcement:


Last week, the DOJ settled a $4 million qui tam case (originally brought by a pharmacist) with two Florida men who engaged in a scheme “to generate prescriptions for compounded drugs.”  These individuals worked with pharmacies to identify compounded drug formulas that generated the highest reimbursement and then solicit prescriptions for these drugs, without regard for the medical necessity for the specific formula.  Telemedicine providers who prescribed the compounded drugs, often without an appropriate medical examination, were paid by these two individuals.  Many of the patients whose prescriptions were filled were individuals covered by Tricare, the health care insurance for veterans.  A total of 36 other companies, including pharmacies, health care providers and others already settled their cases in connection with the scheme.  And, although these individuals have not yet been excluded from participation in federal health care programs going forward, the settlement agreement reserves the right to do so in the future.  A link to the DOJ’s press release follows:

Former Owners of Telemarketing Company Agree to Pay At Least $4 Million to Resolve False Claims Act Allegations | OPA | Department of Justice


Also last week, the DOJ arrested a New York pharmacist (owner of Lucky Care Pharmacy, among other entities) alleging that he conspired to commit health care fraud and pay kickbacks/bribes to customers who purchased high-end compounded drugs that were not medically necessary and were billed to and reimbursed by Medicare and Medicaid to the tune of $4 million.  The case was investigated by the Medicare Fraud Strike Force of the DOJ’s Fraud Section.  For nearly 5 years, this pharmacist allegedly built his business around this illegal scheme, and for a portion of that time, he was being investigated by the DOJ.  As if being on the DOJ’s radar already was not enough, in late 2020, the pharmacist wired $100,000 from his pharmacy’s bank account to a luxury car dealer and purchased the latest Porsche all-electric Taycan worth more than $250,000.  It was then that the Strike Force moved in, executing a search and seizure warrant, seizing the newly acquired vehicle as well as large sums of cash and other luxury goods.  The pharmacist now faces up to 10 years in prison for conspiracy to commit health care fraud, 5 years for conspiracy to pay kickbacks and bribes, and an additional 10 years for unlawful spending.  A link to the DOJ’s press release follows:

Pharmacist Charged in $4 Million Health Care Fraud and Kickback Scheme | OPA | Department of Justice

So, does health care fraud enforcement have you worried?  There are steps pharmacies and pharmacists can take to avoid getting into the kind of trouble these cases represent.  Here are some tips to assist you in putting your worries to rest:

  • Avoid arrangements with marketers who say they will bring your more patients, more prescriptions to fill or more higher reimbursement prescriptions. Any arrangement like that should set off warning bells and should be reviewed by an attorney specializing in health care law.
  • Make sure your relationships with your referring physicians are focused solely on quality and cost, not on any quid pro quo. Again, any arrangement you make with physicians who refer patients to you should be reviewed by your legal counsel.
  • Generate patient loyalty through the same laser-focus on improving quality and reducing cost, not by creating giveaways and other incentives.

A proper review of any arrangements such as the above could save you additional concern down the road.  The Florida Healthcare Law Firm is ready to assist you with your legal needs.  Don’t hesitate to call us if you are worried about health care fraud enforcement.