Is Your Practice or Lab at Risk for Allegations of COVID-19 Testing Fraud?
As the federal government continues to encourage U.S. citizens to get vaccinated, and as the Delta variant continues to account for larger percentages of positive COVID-19 cases in states across the country, testing remains a key component of the nationwide effort to control the virus. However, while federal authorities are encouraging citizens to get tested as necessary, they are also cracking down on health care providers suspected of fraudulently providing and billing for COVID-19 tests.
In May 2021, the U.S. Department of Justice (DOJ) announced that it and other agencies had undertaken a “coordinated law enforcement action to combat health care fraud related to COVID-19.” This specifically included efforts to target health care providers that engaged in COVID-19 testing fraud schemes. Based on the success of these efforts, the DOJ and other agencies are continuing to target health care providers for COVID-19 testing fraud—and they are examining providers’ testing and billing practices during all stages of the pandemic.
Coordinated Law Enforcement Action Targets COVID-19 Testing Fraud
The coordinated effort that the DOJ announced in May resulted in charges against 14 defendants who are suspected of submitting over $143 million in false billings during the COVID-19 pandemic. The defendants include physicians and executives of pathology laboratories and other health care entities. Among multiple other allegations, the DOJ alleges that these defendants:
“[O]ffered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants . . . then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests. In some cases . . . the COVID-19 test results were not provided to the beneficiaries [or their doctors] in a timely fashion or were not reliable, risking the further spread of the disease.”
In order to uncover the defendants’ alleged fraudulent testing and billing practices, the DOJ worked with agents from the Federal Bureau of Investigation (FBI) and the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) in California, Arkansas, Louisiana, Florida, New York, and New Jersey. At the same time, the DOJ also announced that the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) separately took action against, “over 50 medical providers for their involvement in health care fraud schemes relating to COVID-19 or abuse of CMS programs that were designed to encourage access to medical care during the pandemic.”
The defendants targeted in the DOJ’s coordinated action are facing a broad array of charges as a result of their alleged fraudulent COVID-19 testing and billing practices. This includes charges for health care fraud, payment of kickbacks, conspiracy wire fraud, money laundering, and other crimes. If convicted, the defendants face substantial fines and years, if not decades, of federal imprisonment.
Federal Authorities are Continuing to Target All Types of COVID-19 Testing Fraud
While the coordinated effort the DOJ announced in May was notable for its scope, it is far from the Justice Department’s only effort to combat COVID-19 testing-related fraud. The DOJ is continuing to target health care providers nationwide; and, in doing so, it is working both independently and in coordination with the FBI, HHS OIG, CPI/CMS, and other federal authorities.
This raises a critical question: What constitutes COVID-19 testing fraud? When examining the testing and billing practices of providers, labs, and other entities, the DOJ and its law enforcement partners are looking for evidence of any form of fraudulent activity. This includes prohibited practices such as (but not limited to):
- Providing COVID-19 testing without patients’ authorization or consent
- Billing for COVID-19 testing services without evidence of medical necessity
- Billing for COVID-19 testing services and not providing results to patients or their doctors
- Using COVID-19 testing services to obtain patients’ samples and then billing for unauthorized and unnecessary tests
- Falsifying patient information or “phantom billing” for COVID-19 testing services not actually provided
While all Medicare billings for COVID-19 testing services are ripe for federal scrutiny, the DOJ and other authorities are likely to pay particular attention to cases that present certain “red flags” for fraud. For example, billing for an unusually high number of COVID-19 tests increases the risk of a federal audit or investigation. Likewise, if a provider has begun billing for an increased volume of cancer genetic testing, allergy testing, or respiratory pathogen panel testing during the pandemic, this could be viewed as a possible indication that the provider is taking advantage of its increased access to patients’ samples during the COVID-19 pandemic.
Examining Your Practice’s COVID-19 Testing and Billing Practices
Due to the federal government’s current focus on COVID-19 testing fraud and the risks providers, labs, and other entities face when targeted in federal billing fraud investigations, all health care entities that are billing Medicare for COVID-19 testing should take the time to carefully examine their testing and billing practices and procedures. All entities that bill Medicare need to have comprehensive compliance policies and procedures in place—and they must pay particular attention to issues that are current enforcement priorities for the DOJ. Right now, this includes COVID-19 testing fraud.
In order to protect themselves, entities that bill Medicare for COVID-19 testing must have documented policies and procedures that are designed to ensure that only appropriate reimbursement requests get submitted to CMS. Among other things, this means that providers, labs, and other billing entities should:
- Review their existing billing policies and procedures to ensure that they are up-to-date with current CMS standards.
- Review their policies and procedures that are specific to COVID-19 testing, and ensure that they are adequate to prevent unauthorized testing and improper billing. If an entity does not have these policies and procedures, developing them should be a top priority.
- Evaluate their implementation of the above-referenced policies and procedures. Are all personnel doing their part to maintain compliance? If not, additional training may be necessary.
- Audit the practice’s or company’s Medicare billings related to COVID-19 testing, and proactively address any concerns with regard to potentially non-reimbursable requests. Ensure that all reimbursable requests can be substantiated with appropriate documentation.
- Ensure that they have adequate protections in place with regard to their relationships with other entities that may be billing Medicare for COVID-19 testing services.
Of course, even if a provider’s or lab’s testing and billing practices are legitimate, this won’t necessarily prevent a federal inquiry. As a result, in addition to establishing and maintaining compliance, providers and other entities must document their compliance efforts as well. In the event of a COVID-19 testing fraud investigation, being able to affirmatively demonstrate billing compliance will afford the opportunity for an efficient and favorable outcome without unnecessary questions, concerns, or potential liability.
Defending Against a COVID-19 Testing Fraud Investigation
Let’s say your practice or lab is currently under investigation for COVID-19 testing fraud. Maybe HHS OIG has reviewed your practice’s or lab’s billing records and identified potential “red flags,” or maybe the DOJ has received a tip from a patient or employee. What should you do?
If your practice or lab is under investigation for COVID-19 testing fraud (or if you are concerned about the possibility of a COVID-19 testing fraud investigation), you should:
- Engage Federal Health Care Fraud Defense Counsel – At this point, you should not hesitate to engage federal health care fraud defense counsel. As noted above, COVID-19 testing fraud can result in a variety of federal charges all carrying substantial penalties.
- Instruct Personnel Not to Communicate with Federal Agents – No internal personnel should communicate with federal agents unless advised otherwise. All personnel should be instructed to refer any inquiries to an appropriate internal point of contact, who will then communicate with the practice’s or lab’s defense counsel.
- Initiate an Attorney-Client Privileged Internal Compliance Audit – When facing a federal investigation, it is imperative to know what issues, if any, could lead to civil or criminal prosecution. This requires an internal compliance audit which should be conducted with the oversight of the practice’s or lab’s defense counsel in order to establish the attorney-client privilege.
- Identify and Preserve Potentially Relevant Documentation – When facing a federal investigation, it is necessary to identify and preserve all potentially relevant documentation. Destroying, or allowing the destruction of, potentially relevant documentation can lead to additional issues with the DOJ.
- Learn More about Your Situation – Given what is at stake, it will be important for you to have as much information as possible. In addition to speaking with one of our attorneys as soon as possible, we also encourage you to read: What to Do When Facing a Federal Investigation for COVID-19 Health Care Fraud.
Speak with a Federal Health Care Fraud Defense Lawyer at Oberheiden P.C.
If you have questions about COVID-19 testing compliance or need defense counsel for a COVID-19 testing fraud investigation, we encourage you to contact us right away. To speak with a federal health care fraud defense lawyer at Oberheiden P.C. in confidence, call 888-680-1745 or request a complimentary consultation online now.
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.