The Need for Whistleblowers in Combating COVID-19 Related Healthcare Fraud

Over the next few days, we will highlight the ways in which the COVID-19 pandemic has added another layer to existing healthcare fraud. Last year, we put into perspective some of the largest sources of government funding, which include, among other government-sponsored healthcare programs, Medicare and Medicaid. Further, we discussed the projected growth of Medicare and the importance of continued efforts to combat Medicare fraud. These efforts remain important in 2022, as pandemic relief funding for healthcare has opened more opportunities for fraudsters to exploit government resources.

As of July 30, 2022, the Department of Health and Human Services (“HHS”) budgetary resources totaled $2.82 trillion. With respect to COVID-19 spending specifically, data through July 31, 2022, show that HHS budgetary resources total $484,027,721,045. HHS resources were distributed to its thirteen departments, and the Centers of Medicare and Medicaid received the most, with $1.69 trillion in outlays.

Funding for healthcare-related COVID-19 relief can be traced to these laws:

  1. The Families First Coronavirus Response Act (116-127)(“FFCR”);
  2. The Coronavirus Aid, Relief, and Economic Security Act (116-136)(“CARES”);
  3. Paycheck Protection Program and Healthcare Enhancement Act (116-139) (“PPP & HCE”);
  4. The Coronavirus Response and Relief Supplemental Appropriations Act (116-260)(“CRRSA”)
  5. American Rescue Plan Act of 2021 (117-2)(“ARP”). In total, the aforementioned pieces of legislation prompted the distribution of $351.4B to healthcare companies, hospitals, and other providers.

As of September 2021, the funds allocated to healthcare account for 6.72% of all pandemic relief funding. Those healthcare funds also went towards:

  1. The Provider Relief Fund
  2. Vaccines
  3. Substance abuse and mental health services
  4. Federal employee health & safety
  5. Nursing homes
  6. Healthcare research and development.

Criminal cases regarding the exploitation of the pandemic assistance for healthcare have already begun to arise. Considering the amount of time a False Claims Act case can remain under seal, we can expect that our knowledge of False Claims Act cases related to COVID-19 healthcare fraud will increase as time progresses. Since pandemic relief funding began in recent years, there is limited public information on FCA cases concerning the misuse of the funds. But recent criminal cases have already exposed alleged fraudulent activity. 

For example, the Department of Justice (“DOJ’s”) announcement of a coordinated law enforcement action against COVID-19 related healthcare fraud earlier this year noted that 21 defendants across 9 federal districts allegedly caused over $149 million in pandemic-related false billings to the government and “theft from federally-funded pandemic assistance programs.” Some of the misconduct includes the alleged improper use of confidential patient information collected during COVID-19 testing to submit false and fraudulent claims to Medicare.

Defendants also allegedly targeted the HHS and the Centers for Disease Control and Prevention by manufacturing and distributing fake COVID-19 vaccination cards. In addition, there were cases in which the owners of medical clinics purportedly submitted claims overstating the length of patients’ office visits when they went for COVID-19 testing. These are just a few examples of the alleged misuse/theft of the resources allocated to healthcare during the pandemic.

The DOJ’s coordinated law enforcement efforts against COVID-19 related healthcare fraud this year are a continuation of those announced in May of last year. At that time, the DOJ brought criminal charges against 14 defendants including a telemedicine company executive, a physician, marketers, and medical business owners for over $143 million in false billings. 

These cases show the ways in which fraudsters can take advantage of the pandemic relief funds provided to government-sponsored healthcare programs, which constitute some of the largest sources of government funding. While there is currently limited information on FCA cases concerning fraudulent pandemic related misconduct, the DOJ reiterated that it relies on the public’s reporting fraudulent activity. Whistleblowers’ role in reporting healthcare fraud is crucial in the efforts to prevent the exploitation of pandemic relief funding.

Written by Julia-Jeane Lighten of Taxpayers Against Fraud. Edited by James King of Taxpayers Against Fraud. Fact checked by Julia-Jeane Lighten of Taxpayers Against Fraud.