Historic Health Care Fraud Enforcement Action Results in Charges Against 601 Individuals

By Allie Carter (CMC ’19)

On June 28, 2018, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) filed charges against over 600 defendants across 58 federal districts for their alleged involvement in health care fraud schemes encompassing over $2 billion in false billings. This is the largest health care fraud takedown to date.

The indictments announced by DOJ and HHS largely focus on schemes billing Medicare, Medicaid, TRICARE (a health insurance program for active members and veterans of the armed forces and their families), and private insurance companies for medically unwarranted prescription drugs and compounded medications that often were never even purchased and/or given to beneficiaries. Many of the charges involve patient recruiters, beneficiaries, and others who were reportedly bribed in return for providing beneficiary information to providers so the providers could then send fraudulent bills to Medicare.

The cases are largely related to the nation’s ongoing drug overdose crisis. Of the 165 doctors, nurses, and other licensed medical professionals charged for alleged involvements in health care fraud schemes, 162 were charged for their roles in prescribing and supplying opioids and other high-risk narcotics.

The Center for Disease Control (CDC) approximates that 115 Americans die every day of an opioid-related overdose. Nationally, two-thirds of overdose deaths are caused by opioids. Unlike past drug overdose crises, this epidemic is largely enabled by medical professionals who are involved in the unlawful distribution of opioids and other prescription narcotics. Attorney General Jeff Sessions said in reference to the medical professionals who enable the epidemic, “Some of our most trusted medical professionals look at their patients, vulnerable people suffering from addiction, and they see dollar signs.”

Sessions further laments that “Many of these fraudsters have stolen tax dollars, and many have helped flood our streets with drugs. One doctor allegedly defrauded Medicare of more than $112 million by distributing 2.2. million unnecessary dosages of drugs like oxycodone and fentanyl.”

Additional examples include a Delaware physician who owned and operated a pain management clinic accused of “unlawfully prescribing more than two million dosage units of oxycodone products” and a pharmacy chain owner in Texas found to have used “fraudulent prescriptions to fill bulk orders for over one million pills of hydrocodone and oxycodone, which the pharmacy, in turn, sold to drug couriers for millions of dollars.”

This investigation was conducted by the Medicare Fraud Strike Force, a bilateral initiative between DOJ and HHS. The Medicare Fraud Strike Force currently works in 10 locations nationwide. Since its creation in March 2007, the Strike Force has indicted more than 3,700 defendants who together have fraudulently billed the Medicare program for more than $14 billion.

Through this landmark case, DOJ and HHS have indubitably taken action against systemic corruption within the medical system that contributes to the opioid crisis, but they have yet to address any major pharmaceutical companies who have been condemned for contributing to the opioid crisis.

In May 2018, attorneys general from six different states filed lawsuits against Purdue Pharma, the maker of opioid painkiller OxyContin, claiming the company neglected “to adequately disclose the risk of addiction of opioids.” Purdue Pharma has previously been accused of sowing “the seeds of the opioid epidemic,” given a confidential DOJ report that asserts Purdue knew about abuse of OxyContin. Over 16 states have already filed lawsuits against pharmaceutical companies for their role in the opioid epidemic.

Whether or not this health care fraud takedown paves the road for future action against pharmaceutical companies who contribute to the opioid crisis, it remains a landmark success in its capacity to hinder medical professionals involved in the unlawful distribution of opioids and other prescription narcotics.

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