Coronavirus Healthcare Fraud
Healthcare providers, medical technology companies, and other entities in the healthcare sector are facing heavy scrutiny during the coronavirus pandemic. Providers and companies accused of fraud can face steep penalties, and they must engage experienced federal defense counsel at the first sign of an audit or investigation.
Healthcare providers are on the front lines of the coronavirus pandemic, and medical technology companies are working around the clock to develop new tests for coronavirus and its antibodies. Unfortunately, while most providers and companies are doing everything they can to help protect the American public, the extraordinarily high demand for medical services, equipment, and supplies also means that there is an extraordinarily high risk of healthcare fraud.
In order to uncover fraud and prosecute those who are taking advantage of the coronavirus pandemic for unlawful financial gain, federal authorities have no choice but to cast a wide net. As a result, healthcare providers, medical technology companies, and other entities in the healthcare sector nationwide are at risk for being targeted. Furthermore, with several new laws and regulations being passed specifically in response to the pandemic, and with different benefit programs and different insurance companies adopting different standards in response to the unprecedented circumstances at hand, healthcare entities face an extraordinarily high burden when it comes to anti-fraud compliance.
Fraudulent Practices Related to Coronavirus Testing and Treatment
Among the multitude of unlawful practices that can be classified as healthcare fraud, two issues in particular have taken centerstage during the coronavirus pandemic. These are: (i) fraud related to coronavirus testing, and (ii) fraud related to treatment for COVID-19.
Coronavirus Testing Fraud
Coronavirus testing fraud is a major concern for the U.S. Food and Drug Administration (FDA), among several other federal agencies. In particular, the FDA is heavily focused in keeping unauthorized tests off of the market. This includes tests for coronavirus and its antibodies. From medical technology companies that are developing new tests to toxicology laboratories and retailers that sell home test kits, entities throughout the supply chain are being scrutinized for compliance with the Food, Drug, and Cosmetic Act (FD&C Act) and other pertinent laws and regulations.
Healthcare providers are also facing scrutiny for systematically providing coronavirus tests to patients who are not exhibiting symptoms of COVID-19, and those that bill Medicare, Medicaid, and other public and private payors for medically-unnecessary tests can face federal fraud allegations as well. When charged under the False Claims Act or the federal healthcare fraud or insurance fraud statutes, providers (including individual physicians, pharmacists, and business owners) can face fines, exclusion, and other significant penalties.
In addition to auditing and investigating legitimate healthcare providers and other businesses for healthcare fraud during the coronavirus pandemic, federal authorities are also on high alert for intentional fraudulent testing scams. The Federal Bureau of Investigation (FBI) is warning consumers to be wary of direct solicitations and other schemes offering fake testing kits, there have already been multiple instances of medical technology companies facing charges for falsely advertising coronavirus tests that have not been proven to effectively detect COVID-19.
Coronavirus Treatment Fraud
Combatting fraud in relation to coronavirus treatment is another top priority for the federal government, and rightfully so. Offering ineffective and unsafe treatments for coronavirus is dangerous not only for the patients who receive these treatments, but also for their family members and the public at large. As a result, all allegations and indications of fraudulent treatments being introduced to the market are being carefully examined, and federal authorities are prosecuting the companies that manufacture and sell these fraudulent treatments as well as the healthcare providers that administer them to patients.
Healthcare providers and other businesses accused of coronavirus treatment fraud can face risks on multiple fronts. Not only can the advertising, sale, and administration of fraudulent treatment modalities lead to fraud charges, but so can billing Medicare, Medicaid, and other payors for ineffective and unproven treatments. Under several federal statutes, the penalties for healthcare fraud increase when the fraud results in harm (or death), and individuals who are charged criminally can face insurmountable fines and decades of federal incarceration.
Additional Forms of Coronavirus-Related Healthcare Fraud
While testing and treatment fraud may be two of the federal government’s top priorities with regard to combatting healthcare fraud during the coronavirus pandemic, they are far from the only issues with which healthcare providers and other businesses need to be concerned. Federal authorities are also taking aggressive steps to combat other forms of coronavirus-related healthcare fraud, including:
Incorrectly Diagnosing Patients with COVID-19
Incorrectly diagnosing patients with COVID-19 in order to administer reimbursable treatments is a serious form of healthcare fraud that can potentially be prosecuted as a criminal offense. All coronavirus diagnoses should be based on reliable examination protocols and test results, and the reason for each patient’s diagnosis should be thoroughly documented in his or her patient records.
Billing for Unnecessary and Unused Medical Equipment and Supplies
Taking advantage of the pandemic in order to obtain reimbursements for unnecessary medical equipment and supplies is a serious form of healthcare fraud as well. When ordering equipment and supplies, healthcare providers must be able to substantiate medical necessity in order to lawfully obtain reimbursements under Medicare, Medicaid, and other federal healthcare benefit programs.
Overbilling for Medical Services and Billing for Services Not Actually Rendered
During the coronavirus pandemic, healthcare providers must continue to ensure that they are accurately billing for all patient services. Using the incorrect billing codes in order to upcharge payors (referred to as “upcoding”) and billing for services not actually rendered (referred to as “phantom billing”) are both forms of healthcare fraud, and they can both lead to civil or criminal prosecution depending on the specific facts involved.
Anti-Kickback Statute and Stark Law Violations
Patient referrals present risks for prosecution under the Anti-Kickback Statute and Stark Law; and, while the Centers for Medicare and Medicaid Services (CMS) have loosened certain restrictions on the direction of patients at the time of discharge during the coronavirus pandemic, these laws’ prohibitions still apply. As a result, while hospitals and other facilities may be able to keep patients within their networks without running afoul of CMS’s interim guidelines, taking advantage of these financial opportunities could still lead to allegations of healthcare fraud.
The coronavirus pandemic has also spurred the relaxation of certain restrictions on the use of telemedicine services. However, here too, healthcare providers must continue to be careful in order to avoid running afoul of the law. If audited or investigated in relation to telemedicine, providers will need to have clear documentation that substantiates their program billings, and they will need to be prepared to defend against allegations that they provided medically-unnecessary telemedicine services or billed the federal government for services that were not actually provided.
Understanding the Risks of a Healthcare Fraud Audit or Investigation During the Coronavirus Crisis
If your practice or business is targeted in a healthcare fraud audit or investigation during the coronavirus pandemic, what are the risks? The answer to this question depends on a number of different factors, from the specific allegations at issue to the nature of the government’s inquiry:
- What type of healthcare fraud allegations are you facing? Each of the types of healthcare fraud allegations discussed above are very different, and each can lead to charges under different federal statutes. In order to determine what is at risk in your case, you will first need to determine what allegations are on the table.
- Is your business or practice being targeted in an audit or investigation? While an audit involves different procedures from an investigation and is generally viewed as a less-risky inquiry, the reality is that audits and investigations can ultimately lead to the same outcomes. However, defending against each type of inquiry requires a different approach, and healthcare providers need to tailor their defense efforts accordingly.
- If you are facing an investigation, is the investigation civil or criminal in nature? Civil healthcare fraud allegations carry fines, program exclusion, and certain other penalties, but they cannot lead to federal imprisonment. This is not true of a criminal healthcare fraud investigation.
- What steps can you take to assert an effective defense? What documentation do you have available to demonstrate compliance? What other defense strategies can you utilize to avoid fines, prison time, and other penalties? These are critical questions, and in order to answer them you will need to engage the services of a highly-experienced federal healthcare fraud defense attorney.
Speak with a Federal Healthcare Fraud Defense Attorney at Oberheiden P.C.
At Oberheiden P.C., we are representing healthcare providers, medical technology companies, and other businesses in need of qui tam defense, involved in False Claim Act investigation, facing federal criminal charges, and in other legal matters nationwide during the coronavirus pandemic. If you need to speak with an attorney, we encourage you to call 888-680-1745 or contact us online for a free and confidential case assessment.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.