DOJ and VA-OIG Announce New Veterans Affairs Healthcare Fraud Task Force
On October 1, 2019, the U.S. Department of Justice (DOJ) Office of Public Affairs announced that the DOJ and the Department of Veterans Affairs Office of Inspector General (VA-OIG) have established a new joint task force that will focus specifically on targeting VA healthcare fraud. It is known as the Veterans Affairs Healthcare Fraud Task Force. According to the DOJ’s press release:
“The [Veterans Affairs Healthcare Fraud] Task Force combines VA-OIG’s substantial experience investigating healthcare fraud at VA with the Justice Department’s proven track record prosecuting healthcare fraud through its Medicare Fraud Strike Force, which resides within the Criminal Division’s Fraud Section. The Task Force initially will focus on investigating and prosecuting healthcare fraud in VA’s growing Community Care program, under which eligible veterans may receive healthcare from a private provider in their community (rather than from a VA medical facility), similar to the Medicare program.”
The DOJ’s press release quotes an Assistant Attorney General from the Department’s Criminal Division as stating that the new Veterans Affairs Healthcare Fraud Task Force, “leverages the proven success of the Department’s Strike Force model.” This is a reference to the DOJ’s Medicare Fraud Strike Force, which has been in operation in cities around the country since 2007, and which has been directly responsible for numerous prosecutions of healthcare providers and other entities (such as durable medical equipment (DME) distributors and telemedicine companies) suspected of fraudulently billing the federal government.
New Veterans Affairs Healthcare Fraud Task Force Will Target “Community Care” Providers
The Veterans Affairs Healthcare Fraud Task Force’s primary task will be to target private healthcare providers who treat veterans under the VA’s new Community Care program. The Community Care program was created by the VA MISSION Act in June 2019 in order to provide veterans with access to care from approved non-VA healthcare providers. Under the Community Care program, private healthcare providers bill the VA similar to billing Medicare, Medicaid, or Tricare.
As a result, while the program provides new opportunities for veterans and healthcare providers alike, it also provides a new opportunity for fraud artists to take advantage of a highly-complex multi-billion-dollar federal benefit program. For this reason, the DOJ and the VA are trying to be as proactive about combatting fraud under the Community Care program as possible. According to a VA Inspector quoted in the DOJ’s press release:
“[T]his is one of those rare opportunities . . . where we can . . . get ahead of the curve by partnering with the [DOJ] and leveraging its proven strategies for combating fraud in the Medicare program. This Task Force sends a clear message to anyone considering committing healthcare fraud at VA – we will protect our veterans’ healthcare system at all costs.”
Unfortunately, while the risk of intentional fraud makes federal law enforcement efforts like the Veterans Affairs Healthcare Fraud Task Force a necessity, it also means that legitimate healthcare providers who do their best to comply with the law are at risk for investigation and prosecution as well. In the short time since the creation of the VA’s Community Care program, we have already seen a dramatic increase in VA healthcare fraud investigations. Unintentional billing violations are characterized as a form of “fraud” under the False Claims Act; and, with the DOJ’s heavy reliance on data analytics, intentional and unintentional billing violations have equal opportunity to trigger invasive and potentially dangerous federal investigations.
VA Healthcare Fraud Allegations Can Take Many Different Forms
Similar to other types of federal healthcare fraud investigations, the Veterans Affairs Healthcare Fraud Task Force is targeting a broad range of fraud-related allegations. In addition to targeting providers’ and other companies’ VA billing practices, federal agents and prosecutors are closely scrutinizing these entities’ financial relationships as well. Common issues being targeted in VA healthcare fraud investigations include:
- Providing Duplicate (and Unnecessary) Forms of Treatment – Doctors who attempt less-invasive forms of treatment prior to conducting grafts, amputations, and other surgical procedures are in many cases being accused of providing duplicate treatment in an effort to double-bill the VA.
- Patient Monitoring and Repeat Scans – Although veterans who receive grafts and who undergo other major surgical procedures will often need weeks or months of monitoring in order to ensure that their bodies are responding as needed, doctors who order multiple x-rays or other scans for the same patient can be at risk for fraud, waste, and abuse allegations as well.
- Lack of Medical Necessity – Similar to Medicare, Medicaid, and Tricare, the VA’s Community Care program has specific standards regarding what constitutes a “medically necessary” service, scan, or device. Doctor’s offices, clinics, laboratories, and other facilities that bill for services, scans, and devices that do not meet these standards can face substantial fraud allegations.
- Prescription Drug Fraud (Including Opioid Diversion) – Mitigating the prevalence and risk of opioid abuse among veterans is currently another top VA priority. As a result, doctors’ prescription practices are being heavily scrutinized, and allegations of diverting and providing medically unnecessary opioid prescriptions can be extremely dangerous for prescribing physicians.
- Coding Errors and Billing Violations – Some of the most-common allegations against legitimate healthcare providers in VA fraud investigations involve the improper use of CPT codes and other similar types of billing violations. This includes submitting the wrong billing code (often prosecuted as “upcoding” based on allegations of intentionally overbilling the VA), failing to bill for related services at discounted “bundled” rates, and billing for services not actually provided as a result of submitting an incorrect code.
- Anti–Kickback Statute Violations – Under the Anti-Kickback Statute, physicians, pharmacists, DME and telemedicine company owners, clinic and laboratory owners, and other individuals and entities can be prosecuted civilly or criminally for engaging in transactions that result in the improper use of VA-reimbursed funds. This includes the payment of improper referral fees, commissions, and other cash or in-kind remuneration.
- Stark Law Violations – The Stark Law (or Physician Self-Referral Law) contains prohibitions similar to those in the Anti-Kickback Statute, although its scope is more limited and physicians and other company owners targeted in Stark Law investigations are “only” at risk for civil charges. However, the consequences of a Stark Law investigation can still be extremely severe, and physicians who participate in the VA’s Community Care program can expect to face close scrutiny.
Examples of Recent Veterans Affairs Healthcare Fraud Task Force Cases
Despite being publicly announced on October 1, 2019, the Veterans Affairs Healthcare Fraud Task Force has already taken part in several “takedowns,” working in cooperation with the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and the Internal Revenue Service (IRS) Criminal Investigations Division. Examples of the Veterans Affairs Healthcare Fraud Task Force’s early enforcement efforts include (Oberheiden, P.C. did not represent the defendants in any of these cases):
1. Compounding Pharmacy Fraud Involving “Unnecessary and Expensive Creams”
According to the DOJ’s press release, the Veterans Affairs Healthcare Fraud Task Force participated in a recent investigation targeting a compounding pharmacy and related entities and individuals who allegedly billed the Department of Labor-Office of Worker’s Compensation and Blue Cross Blue Shield for “unnecessary and expensive creams” provided to VA employees. Similar to opioid fraud, compounding pharmacy fraud has seen a recent resurgence in federal law enforcement activity, with federal agents and prosecutors frequently questioning the legitimacy and medical necessity of compound creams and similar types of medications.
2. Alleged Kickback Scheme Involving More than $510 Million in Illegal Payments
The DOJ’s press release also indicates that the Veterans Affairs Healthcare Fraud Task Force recently participated in a federal healthcare fraud investigation involving more than $510 million in alleged illegal reimbursements from Tricare-reimbursed funds. According to the press release, the defendants are facing multiple criminal charges under the Anti-Kickback statute and various other federal laws.
Have You Been Contacted by the Veterans Affairs Healthcare Fraud Task Force?
If your business or practice bills the VA under the Community Care program and you have been contacted by federal agents from the DOJ or the VA-OIG, it is important that you seek experienced legal representation immediately. Federal healthcare fraud investigations can progress quickly, and you need to try to protect yourself against being charged if at all possible.
At Oberheiden, P.C., our attorneys have centuries of combined experience on both sides of federal healthcare fraud investigations. Our attorneys have collectively handled thousands of federal cases, resolving the vast majority of these cases without any civil or criminal liability for our firm’s clients. Meet the attorneys on our federal healthcare fraud defense team.
Contact Us 24/7 for a Free and Confidential Case Assessment
For more information about how we defend healthcare providers and other individuals and entities during VA healthcare fraud investigations, call 888-680-1745 or contact us online for a free and confidential case assessment. Our attorneys are available to speak with prospective clients nationwide 24/7.
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.