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DOJ Announces Unprecedented Coordinated Action Against COVID-19 Healthcare Fraud: A Lucosky Brookman LLP Perspective

In a groundbreaking move on April 20, 2023, the U.S. Department of Justice (DOJ) unveiled criminal indictments against 18 individuals across nine federal jurisdictions, accusing them of orchestrating various fraudulent schemes related to COVID-19 healthcare. This marks the most extensive coordinated legal action ever taken against COVID-19 healthcare fraud, involving an alleged misappropriation of nearly half a trillion U.S. dollars in federal pandemic relief funds.

The Task Force Behind the Action

The driving force behind this colossal operation is the COVID-19 Fraud Enforcement Task Force, established in May 2021. Initially focused on scrutinizing fraudulent activities surrounding federal relief programs like the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, the Task Force has now broadened its scope. The DOJ is leveraging its comprehensive enforcement arsenal to eradicate all forms of pandemic-related fraud, not merely those linked to economic relief initiatives.

Exploitation of the HRSA COVID-19 Uninsured Program

Among the charges, several defendants are accused of manipulating the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program. This program was designed to offer uninsured patients access to COVID-19 testing and treatment while compensating healthcare providers for their services. The DOJ contends that some defendants submitted fraudulent claims for insured patients and billed for non-existent services. In one instance, a defendant from the Central District of California allegedly submitted fraudulent claims amounting to approximately $230 million. The program was discontinued after its funds were depleted in 2022.

Misuse of Provider Relief Fund (PRF)

The DOJ has also initiated charges under the Provider Relief Fund (PRF) Initiative, a component of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PRF was intended to financially assist frontline healthcare providers during the pandemic. One healthcare provider in the Eastern District of Louisiana is accused of submitting counterfeit loan documents and misusing the funds, which were meant for providing medical care to COVID-19 patients. This case adds to 11 other similar prosecutions.

Fraudulent Supply of COVID-19 Test Kits

For the first time, the DOJ has filed charges against suppliers of over-the-counter COVID-19 test kits. Medicare extended coverage for these test kits in April 2022. However, the DOJ alleges that suppliers took advantage of this by shipping tests to patients, including deceased ones, without their consent. This was purportedly achieved by illegally acquiring Medicare beneficiary identification numbers online, leading to fraudulent Medicare claims exceeding $8.4 million.

PPP and EIDL Loan Fraud

Additionally, two defendants are charged with fraudulently obtaining PPP and EIDL loans, adding to the growing list of federal pandemic relief fraud cases.

The Road Ahead

In the wake of this announcement, heightened healthcare fraud enforcement is anticipated. As stated by Attorney General Merrick Garland, the federal government is committed to utilizing "every available resource to combat and prevent COVID-19 related fraud and safeguard the integrity of taxpayer-funded programs."