Back in February, the Department of Justice’s Criminal Division Fraud Section released its annual review. Of the Fraud Section’s three litigation divisions, Health Care Fraud, Market Integrity and Major Frauds and Foreign Corrupt Practices Act, Health Care Fraud is the largest with nearly twice as many trial attorneys and the most active unit.

In addition to the usual statistics about the number of attorneys, defendants charged and number of trials, the report also announced a change in how their trial attorneys are assigned in the field. Previously, trial attorneys were assigned to strike force cities in 24 judicial districts. Under the new deployment, the cities are grouped into regions allowing a broader approach and sharing of resources in wider areas.

The report noted that enforcement actions were prioritized in areas involving pharmaceuticals, telemedicine, laboratory testing and durable medical equipment. There is also an emphasis on vulnerable populations, such as the elderly or addicted patients.

DOF continues to utilize its analytics unit to identify suspicious healthcare billing patterns and geographic hot spots for fraudulent activities. The analytics unit, formed in 2018, provides proactive referrals based on the data analysis.

Earlier this month, the U.S. Department of Health and Human Services, Office of Inspector General (HHS, OIG) issued a special fraud alert advising healthcare providers to exercise caution when contracting with telemedicine companies. Such alerts are significant as they put providers on notice that OIG intends to investigate and prosecute potential fraud regarding telemedicine/. Such notices provide the opportunity for healthcare providers to review their practices and compliance, as well as list examples of suspect practices in the industry.

Historically, federal regulations limited the use and scope of telemedicine. It became widely available, however, during the COVID crisis that necessitated the loosening of government regulations. While a relaxation of regulations and restrictions offered patients greater access to physicians, it also opened the door to fraudulent conduct. In previous articles, we explored schemes involving compound medicines, genetic cancer screening (CGx and PGx tests) and durable medical equipment (DME) such as orthotic braces.

This latest fraud alert confirms that OIG is still aggressively targeting DME companies, laboratories and pharmacies using telehealth services. The OIG alert offers a non-comprehensive list of factors that they examine in potential fraud cases, including:

1. Patients that are referred to a practitioner through a telemedicine company, telemarketing, recruiter, call center, health fair or internet;
2. Practitioner has only limited access or contact with the alleged patient to meaningfully access the medical necessity of the services solicited;
3. Telemedicine company compensates the practitioner based on the volume of prescriptions and services;
4. Telemedicine company only provides services to federal health care program beneficiaries, and does not accept private insurance;
5. Telemedicine company only provides a single class of products such as braces, genetic testing, compound medicines – pain, scar and vitamin creams – thus limiting a practitioner’s treatment options; and
6. Telemedicine company does not expect its physicians to follow up with the patients regarding their prescriptions or services.

This alert expressly notes that proactive marketing that advertises free or low cost items or services covered by federal healthcare programs and exclusively marketed to such beneficiaries is “suspect”. Additionally, any program that limits a practitioner from contacting a patient to follow up or offer other medical services is suspect.

While HHS, OIG alerts provide valuable guidance for practitioners and other healthcare professionals, they also provide federal prosecutors the opportunity to argue that a provider’s good faith defense is limited after such an alert has been issued, i.e. that providers are on notice that such practices as suspect.

Stahl Gasiorowski Criminal Defense Attorneys have represented dozens of physicians, marketers, telehealth companies and pharmacists in federal healthcare fraud investigations. We proactively and aggressively protect our clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

The Department of Justice just announced charges against 21 individuals in a nationwide crackdown of COVID-19 related prosecutions that resulted in $150 million worth of fraud. The schemes were varied and involved medical doctors, medical labs, marketers and others in the healthcare field.

For instance, two owners of a lab in California allegedly billed more than $125 million in fraudulent claims. In Maryland and New York drive through test site operators are accused of using confidential patient information to bill for lengthy office visits that never occurred. In New Jersey, five individuals were accused of paying or receiving kickbacks for referring COVID tests to a particular lab. Even though the tests were medically necessary, and the lab only billed the allowable rate to the government program, the lab was accused of violating the anti-kickback statute that prohibits paying individuals or companies to refer tests.

The Maryland case charged a physician with submitting false claims to Medicare and private insurers. The defendant owned drive through COVID testing sites. Employees gathered patient information at the sites and later submitted false claims for complex in office visits for other healthcare procedures that never occurred.

In Florida, a registered nurse was charged with signing huge numbers of medically unnecessary doctor’s orders in exchange for sham telemedicine consulting fees. Another case in Florida charged individuals with fraudulent Medicare billing for medical equipment that was obtained by paying kickbacks to marketing companies that solicited patients for equipment they didn’t need.

In other schemes, defendants in California were charged with allegedly counterfeiting vaccine cards. Another case involved a hospital pharmacy director who obtained authentic Moderna dose lot numbers and used them to falsify vaccine ecards.

In New Jersey, one of the District’s first healthcare fraud trials just resulted in a guilty verdict against a medical sales representative of a diagnostic lab who paid kickbacks to a physician for referring tests to the lab. In an effort to disguise the kickbacks, the marketer placed the physician’s medical assistant on the lab’s payroll. In a related scheme, the marketer was paid for promoting medically unnecessary compound medicines that certain insurance plans covered. The defendant and others paid kickbacks to doctors to prescribe the unnecessary compounds without even examining the patients.

Other cases have charged individuals with fraudulently obtaining relief funds from the Coronavirus Aid, Relief and Economic Security Act. A 2020 bill that provided billion in emergency financial assistance.

These and scores of other cases highlight federal authorities continuing investigations and DOJ’s aggressive prosecution of a variety of healthcare fraud schemes. These schemes involve medically unnecessary compound medicines, genetic cancer tests, kickbacks on prescriptions for DME – durable medical equipment – such as braces, as well as COVID-19 tests.

Federal healthcare laws and regulations are complex. There are countless ways for doctors, pharmacists, lab owners and marketers to violate these laws. Stahl Gasiorowski Criminal Defense Lawyers have extensive experience representing individuals and corporations accused of healthcare fraud. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

In addition to the 93 U.S. Attorney’s Offices around the country that investigate and prosecute health care fraud, the Fraud Section of the Department of Justice’s Criminal Division based in Washington D.C. has approximately 76 federal prosecutors devoted to such prosecutions. This DOJ Unit targets complex health care fraud involving illegal prescription, distribution and diversion of opioids; telemedicine fraud; and fraud related to COVID, including counterfeit vaccine cards.

The just released year-end report for 2021 reveals the total cases prosecuted and significant cases of note. The unit charged 202 individuals involved in $1.75 billion in alleged losses, with a significant number of guilty pleas, as well as convictions at trial.

Just in September 2021 alone, DOJ announced charges against 138 defendants, including 42 medical professionals, in connection with a national health care fraud enforcement action.

The Unit is assisted by a data analytics team that identifies suspicious health care billing patterns and likely geographic hotspots for fraud and illegal opioid distribution. In 2021, this data analytics team made 385 proactive investigative referrals to various federal law enforcement agencies.

In addition to the illegal prescription and distribution of opioids, the Unit has aggressively targeted laboratories, telemedicine doctors and nurse practitioners, marketers and pharmacies engaging in illegal kickback schemes. These schemes are designed to induce medical professionals to order medically unnecessary compound medicines, such as pain creams, scar creams, vitamins and migraine medication; or orders for unnecessary laboratory tests for genetic cancer screenings. The payments include money based on a per prescription basis, whether in the form of direct payments, payments to the physician’s spouse, or disguised as lease payments or alleged ownership interest payments for a physician-owned lab.

Stahl Gasiorowski Criminal Defense Attorneys actively and aggressively defend clients being investigated and prosecuted for health care fraud. Over the past five years we have defended numerous physicians, pharmacists, marketers and lab owners accused of health care fraud. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rgs@sgdefenselaw.com.

For years there have been articles about the advantages of telehealth to ease costs, time and travel for patients in rural and underserved areas, and those who may have difficulty getting to their physician’s office. The CARES Act of March 2020 (Coronavirus Aid, Relief and Economic Security Act), greatly expanded the availability of telemedicine by requiring Medicare to cover and reimburse doctors at the same rates as in-person services. This resulted in many more patients having access to telehealth services for many more types of medical issues, as well as expanding the base of physicians willing to employ remote services because of the parity of reimbursement. In addition, the CARES Act lessened requirements that the telemedicine physician have a preexisting relationship with the patient, handle only certain types of diagnoses and be limited to certain geographic areas.

As is the case in many areas of highly regulated activities, beneficial changes to health care to meet certain health challenges often result in increased opportunities for fraud. Over the past year, the Department of Justice announced scores of criminal cases against telemedicine doctors, marketers, and pharmacies for abusing the system resulting in more than $1 billion in losses. Closed door pharmacies and marketers paid telemedicine doctors and nurse practitioners kickbacks (fees for “completed doctor’s orders” – scripts that were reimbursed by Medicare) for prescribing unnecessary pain, testosterone and scar creams; durable medical equipment such as braces; and genetic testing for cancer without speaking with the patient, or having only a very brief interaction. Many such orders were prescribed using pre-filled prescription forms provided by the marketers or pharmacies.

Whether unwittingly, or purposely, scores of professionals and marketers jumped on the opportunity to take advantage of the expanded telemedicine opportunities afforded by the CARES Act and various state laws that were expanded to help the millions of people suffering from Covid.

The anti-kickback statute (AKS) criminalizes the knowing and willful solicitation or receipt of any remuneration

1. in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(1)(A)-(B).

Likewise, the AKS forbids offering or paying any remuneration to a person to induce them

1. to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or
2. to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.42 U.S.C. § 1320a-7b(b)(2)(A)-(B)

While there are limited safe harbor exceptions, generally physicians, pharmacists, marketers or anyone else involved in the providing of medical equipment, drugs or services cannot be paid for the referral on a per patient basis – meaning that marketers cannot be paid for referring patients to a DME company or pharmacy where the marketer’s fee is based on a percentage or flat fee of what is collected from Medicare. Similarly, doctors cannot be paid based on a completed doctor’s order (prescription that has been reimbursed) by a healthcare provider. And pharmacies cannot pay marketers to refer prescriptions to them based on a percentage or flat fee per reimbursed script. In addition, such activities can also be charged as healthcare fraud since they are often medically unnecessary.

We have represented many doctors, pharmacists and marketing companies charged with healthcare fraud in federal court. Stahl Gasiorowski Criminal Defense is here for all your criminal legal needs. We are experienced in all types of complex criminal matters involving a many types of electronic evidence. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rstahl@stahlesq.com.

The United States is slowly moving to catch up with medical practices in some European and Asian countries in using technology to avoid an in-person doctor’s appointment. Without having to schedule and wait for an appointment, take time off from work, or leave home, a person can have common aliments diagnosed using their smartphone. Telemedicine is the use of telecommunication and technology to provide clinical healthcare at a distance.
Ailments such as the flu, bronchitis, sinus infections, sore throats, rashes, and stomach aches can often be effectively diagnosed without an in-person doctor’s visit. The increase in healthcare costs has led to the use of technology to treat more patients at less cost. Recently CVS announced that it started a nationwide telemedicine service that allows customers to use their smartphone video capabilities to “see” a doctor for conditions such as colds, skin issues, and other general wellness issues. The service will cost $59 and may eventually be covered by insurance once CVS acquires Aetna.

Medicaid, the government’s healthcare coverage for low-income individuals, has cautiously started to embrace the use of technology for limited remote patient care. Medicaid permits the use of phones, faxes, email and remote patient monitoring devices to collect and transmit patient data for monitoring and diagnosis. However, the program is closely monitored for fraudulent billings and abuse.

Each state has its own requirements and rules in using telemedicine. Some states require physicians to be licensed in the state where the patient is located, rather than simply where the physician performs her analysis. This can be easily violated when patients are in bordering states and seeking medical diagnosis and treatment through their smartphone or the internet. Record keeping is also extremely important, as all Medicaid providers are required to retain records to substantiate their billings. The use of the correct billing codes for telemedicine is paramount. If an office visit is billed for a telemedicine event, the physician may be investigated for false or fraudulent billing.

The U.S. Department of Health and Human Services Office of Inspector General and the Department of Justice devote substantial resources investigating and prosecuting healthcare fraud and abuse. The U.S. Attorney’s Offices in the DNJ, SDNY and EDNY are very active in policing medical providers’ billing and prescribing practices. Informed and experienced legal counsel is a must to advise medical providers and medical billing services in this ever-expanding use of technology and medicine.

For questions regarding health care, Medicaid or Medicare fraud, contact Stahl Gasiorowski Criminal Defense Lawyers. Our offices are located in Mountainside, New Jersey, and New York City. Contact us online or call us at 908-301-9001.

There is an alarming trend towards aggressive investigations by state and federal authorities on physicians. Whether it is by the state medical boards, DEA or federal or state prosecutors, doctors’ practices are subjected to heightened scrutiny. While this may be traced to the war on drugs, recent deaths related to the abuse of prescription opioids, and the criticism the DEA has faced for its failure to develop measureable results in its enforcement efforts; the genesis is less important than the trend itself for those subjected to the harsh spotlight of scrutiny.

Under the standard that a physician is guilty of criminal conduct if he or she prescribes without “a legitimate medical purpose” and “outside the usual course of his or her professional practice,” many good, decent, over-worked physicians find themselves fighting to keep their licenses, DEA registrations and freedom. This is particularly true for those brave souls who continue to help patients with chronic, non-cancer pain.

The law enforcement climate surrounding prescribing opioids has resulted in many good physicians abandoning that aspect of their practice and patients. This has had the effect of reducing the number of physicians willing to treat those in chronic pain, while increasing the scrutiny on those who continue to do so. Those physicians now have become a limited pool of targets for law enforcement and regulatory agencies.

Most alarming is the increasing number of criminal investigations using undercover agents pretending to be patients with chronic pain. These covert operations may be run independently, or in conjunction with the medical board and DEA administrative authorities. These investigations may be initiated by a complaint from a pharmacy about the number of prescriptions by a particular doctor, a complaint by a patient or the patient’s insurer, a check with the Prescription Monitoring Program revealing a larger number of opioid prescriptions, or a motor vehicle stop of patients that are interviewed about their medications. With little more than a suspicion that the physician may be over-prescribing, a full-fledged undercover operation could be launched.

Should the undercover operation reveal certain conduct or actions that appear inconsistent with law enforcement’s view of normal medical practice, the physician and her office may be subjected to a search warrant, seizure of medical records and computers, administrative or grand jury subpoenas for medical records and testimony, and the entire staff may be interviewed and treated like co-conspirators. The devastating effects of such actions can result in severe economic and reputational losses to the medical practice.

The dangers faced by the physician require immediate retention of experienced, skilled defense counsel to represent and protect their interests. The dilemma faced by the physician may come down to fighting to keep her DEA registration and ability to prescribe Schedule II-V drugs, protecting her medical license or potentially waiving her Fifth Amendment right to remain silent in a criminal investigation. These “parallel investigations” – criminal and administrative at the same time – often present a Hobson’s choice of actively defending one’s medical license by producing documents and testimony, or protecting one’s freedom and not testifying until the full scope and breathe of the criminal investigation is known. Only experienced criminal defense counsel can competently analyze the situation and offer advice about how to proceed. Every licensed professional must worry about their ability to continue in their chosen field, however, the first and foremost concern must be for one’s liberty. Although the instinct is understandable, rushing to defend the administrative action, while a parallel criminal investigation is on-going, may lead to disastrous results.

The dichotomy is straightforward. Physicians are trained to listen to their patients, rely in great part on their self-reporting of their conditions and pain, and to establish a relationship of trust. Law enforcement and regulatory bodies turn that relationship on its head and undermine what is a “legitimate medical purpose.” They hold physicians to a heightened standard of verification and a view that pain patients lie and deceive to obtain the medications for their own addictions or for diversion. Given this dichotomy, is it any wonder that physicians face increasing peril in their practices?

The attorneys at Stahl Gasiorowski Criminal Defense have decades of experience representing physicians, dentists and other medical professionals in federal and state criminal and administrative investigations. If retained early in the investigation, our goal is to prevent criminal charges from being pursued or filed, and to protect the license and registration of the healthcare professional.

Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact us to discuss your case, call 908.301.9001 for our NJ office and 212.755.3300 for our NYC office, or email us at rstahl@stahlesq.com.