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Combating Health Care Fraud - October 2010

Financial fraud is one of the top priorities of our office, and, more specifically, health care fraud has been an area of renewed focus. As our nation struggles to find ways to provide health care to citizens, it seems that the least we can do is to make sure that criminals are not stealing from our taxpayers.

In 2009, President Obama formed the Health Care Fraud Prevention and Enforcement Action Team, known as “HEAT.” As part of the HEAT program, the Department of Justice in Washington sent a Medicare Strike Force to Detroit. This team of prosecutors has been investigating and prosecuting cases involving fraudulent Medicare claims. To date, the Strike Force has charged 95 defendants with committing fraud schemes amounting to almost $100 million in taxpayer funds.

Schemes include the performance of unnecessary testing and treatment by physical therapy clinics, home health care providers, and drug infusion clinics to generate payments from Medicare. In some instances, they provide no services at all, but submit fictitious billing records to Medicare.

These criminals prey on vulnerable members of our community who will sign documents and provide personal information in exchange for cash or sometimes prescription drugs, such as Vicodin and Xanax.

As a result of the great success of the HEAT Medicare Strike Force, we have formed a new Health Care Fraud Unit in this office with six lawyers addressing criminal health care fraud. This unit is charged with investigating and prosecuting cases of health care fraud, similar to the cases the Strike Force has prosecuted, as well as the diversion of prescription drugs.

“Diversion” refers to drugs being diverted from legitimate medical purposes, to be used for illicit drug abuse, when doctors and pharmacists knowingly prescribe or fill controlled substance prescriptions for non- medical purposes.

For many years, prescription drug cases were prosecuted along with other illegal drug cases, but one of the new realities of the prescription drug abuse problem is that it is increasingly intertwined with health care fraud. Unscrupulous health care providers are taking advantage of people who are dependant on prescription drugs. In exchange for allowing their Medicaid card to be billed for medical tests that are unnecessary or not performed, these nominal “patients” are provided with prescriptions drugs that are not medically necessary.

For that reason, as part of our office reorganization, we placed the responsibility of prosecuting prescription drug cases in the Health Care Fraud Unit. The primary federal law enforcement agency responsible for investigating prescription drug cases is the Drug Enforcement Administration, which organized a Tactical Diversion Squad in late 2009. The primary federal law enforcement agencies investigating Health Care Fraud are the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General. All three agencies are now working together on cases that involve both health care fraud and prescription drug diversion. The newly formed Health Care Fraud Unit prosecutes cases that involve health care fraud, illegal drug diversion, or both offenses.

We are also using our civil enforcement tools, such as qui tam cases, affirmative civil enforcement actions, and asset forfeiture, to attack health care fraud from every avenue possible. Attorneys in our civil Affirmative Litigation Unit meet regularly with attorneys in our criminal Health Care Fraud Unit to collaborate and attack cases in parallel proceedings to maximize recoveries. In civil cases, our attorneys are able to recover treble damages.

We are also collaborating with partners in the private sector. We recently hosted a health care fraud summit, in which we partnered with the U.S. Attorney’s Office in the Western District of Michigan, a longtime leader in health care fraud enforcement. At the summit, law enforcement agencies and health care industry members shared information and strategies to attack health care fraud.

We want health care providers to know that we are paying attention to billing records, and that abuses will be aggressively prosecuted. We hope that our recent successes and continued efforts will deter others from cheating the health care system.

Barbara L. McQuade
United States Attorney

Updated March 20, 2015