On June 27, 2024, the Department of Justice (DOJ) announced its 2024 National Health Care Fraud Enforcement Action, which resulted in criminal charges against 193 defendants for alleged participation in various health care fraud schemes alleged to have resulted in approximately $2.75 billion in losses for Medicare. The takedown spans 32 federal districts, and charges were brought in 145 cases. 

The DOJ charged 36 of these defendants in connection with the submission of over $1.1 billion in fraudulent claims to Medicare, which resulted from schemes involving telemedicine clinical laboratories. The below discusses only a few of the cases, but the general themes run throughout and provide insight into the Government’s concerns in these prosecutions.

In one of these cases, the DOJ charged a Georgia woman with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the Anti-Kickback Statute (AKS). In this case, the defendant allegedly engaged in a scheme in which she and her co-conspirators owned, operated, and had a financial interest in various companies, including durable medical equipment companies, where she would provide qualified leads to clinical laboratories regardless of medical necessity. In addition, she had a company that she used to ship out Cancer Genomic Screening (CGx) test kits to beneficiaries regardless of whether the beneficiaries wanted them or needed them. In return, she submitted invoices to the lab to be paid. The case is pending in the District of New Jersey, and the defendant faces potential criminal liability.

In another case charged as part of this action, the DOJ charged a Texas man with one count of conspiracy to defraud the United States and to pay and receive health care kickbacks, five counts of paying health care kickbacks, and three counts of money laundering. The defendant in this case was the owner of two clinical laboratories and allegedly offered and paid kickbacks to marketers in exchange for referrals for testing. The defendant also allegedly signed doctor’s orders authorizing medically unnecessary testing. Allegedly, Medicare paid the laboratories approximately $54 million as a result of kickback-tainted claims. The case is pending in the Northern District of Texas, and the defendant faces potential criminal liability.

In another case charged as part of this action, two Tennessee men were charged with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and to pay and receive health care kickbacks and paying and receiving health care kickbacks. These charges resulted from the defendants’ alleged role in selling doctor’s orders for medically unnecessary genetic tests, medications, and durable medical equipment (DME) to laboratories, pharmacies, and DME companies. Allegedly, the defendants obtained orders for their DME companies by paying kickbacks and bribes to purported telemedicine companies and in exchange for doctors signing orders for DME. This scheme allegedly caused the submission of $6 million in false and fraudulent claims to Medicare. Further, Medicare paid $2 million dollars to the defendants’ DME companies on these allegedly false claims. The case is pending in the Middle District of Tennessee, and the defendants face potential criminal liability.

This widespread enforcement action by the DOJ demonstrates the government’s commitment to rooting out healthcare fraud and abuse, especially in the telemedicine and clinical laboratory spaces. This is a timely warning to telemedicine providers and clinical laboratories of the need to ensure compliance with fraud and abuse laws.

Lily Denslow contributed to this article