DOJ Urged to Create Coronavirus False Claims Task Force

DOJ News & Litigation Updates

DOJ Urged to Create Coronavirus False Claims Task Force

On behalf of the National Whistleblower Center and the law firm of Kohn, Kohn and Colapinto, LLP, attorney Stephen Kohn requested the Department of Justice “establish a task force to monitor and investigate violations of the False Claims Act related to allegations of fraud committed in federal programs related to the Coronavirus crisis.” The letter from Kohn highlighted the history of the False Claims Act, which was enacted in 1863 in response to fraud during the Civil War, and described the importance of deterring “anyone from engaging in misconduct in the administration of government-sponsored medical or health and safety programs” during this time.

Kohn urged the DOJ to take “prompt and effective action” through the creation of a nation-wide task force to protect against misconduct and fraud in government-sponsored health-care programs designed to combat the Coronavirus and advocated prioritizing False Claims Act cases related to Coronavirus programs. Kohn further highlighted the need to send a message to those involved in fighting the Coronavirus to act ethically and honestly by aggressively investigating cases. The letter requested a response by March 23, 2020.

In a statement published by Bloomberg Law, a DOJ spokesperson said “the Department of Justice is committed to pursuing all manner of fraud in federal health care programs, including violations disclosed by whistleblowers under the False Claims Act, especially during this critical time as our nation responds to the outbreak of COVID-19.”

Read the letter to DOJ here.

The Supreme Court Postpones March Oral Arguments

On Monday, March 16 the Supreme Court announced that it is postponing oral arguments scheduled for March 23 – March 25 and March 30 – April 1.

According to the announcement, the Supreme Court will “examine the options for rescheduling those cases in due course in light of the developing circumstances,” but made no mention of the remaining arguments scheduled to be heard this term.

The Supreme Court was scheduled to hear a number of high-profile cases during this period, including President Donald Trump’s appeal of three lower court rulings that would require disclosure of President Trump’s financial and tax records to several House committees and to the New York District Attorney's office, a copyright dispute between Google and Oracle concerning Google’s use of Oracle’s Java programming language to create the Android phone, and a case challenging the right of religious schools to fire teachers without running afoul of employment discrimination laws.

The Supreme Court’s announcement also noted that the postponement of oral arguments in light of public health concerns is not unprecedented, and cited to the postponement of scheduled arguments in October 1918 due to the Spanish flu epidemic, and shortened argument calendars in August 1973 and August 1978 due to yellow fever outbreaks.

The Supreme Court will still hold its regularly scheduled conference on Friday, March 20 to discuss pending appeals, with some Justices possibly participating by telephone. The Supreme Court will also issue its regularly scheduled Order List on Monday, March 23 at 9:30 AM, announcing the cases the Supreme Court has decided to hear or reject.

Read the Supreme Court’s press release here.

Health Care Enforcement News

Colorado Jury Finds VA Employee Guilty of Defrauding Department Of Veterans Affairs Of Nearly $19 Million

After an eight-day trial, a Denver jury found former VA employee Joseph Prince guilty of health care fraud, conspiracy, payment of illegal kickbacks and gratuities, conflict of interest, and money laundering.

Prince was a Beneficiary Provider Relationships Specialist with the VA’s Spina Bifida Health Care Benefits Program, a program designed to cover the medical needs of children of certain veterans of the Korea and Vietnam wars suffering from Spina Bifida. As a Beneficiary Provider Relationships Specialist, Prince assisted health care providers, Spina Bifida beneficiaries, and their families with health care needs and reimbursements.

According to the evidence presented at trial, Prince enrolled family members of the program’s beneficiaries with home health entities that were run by Prince’s associates, including his wife, brother-in-law, half-sister, and friends, despite knowing these home health entities were shams, and were not authorized providers by the VA. In addition to encouraging family members to submit bills to the VA even though the home health entities were not approved providers, Prince encouraged family members to submit bills for services not allowed by the VA and for services not provided. In return for the referrals, Prince accepted payments from the home health entities.

In total, Prince referred approximately 45 Spina Bifida beneficiaries to sham home health entities, which resulted in approximately $19 million worth of fraudulent claims paid by the Spina Bifida Health Care Benefits Program. In return, Prince received approximately $1.5 million in kickbacks. The government announced it is seeking forfeiture and restitution to the Veterans Health Administration in the amount of approximately $19 million.

Read the DOJ Press Release here.

California Acupuncturist Pleads Guilty to Health Care Fraud, Sentenced to 12 Months in Prison

Health care provider Haichao Huang was sentenced to 12 months in prison, ordered to serve two years of supervised released, and to pay restitution of $807,785.38, and a $10,000 fine for committing health care fraud and making false statements regarding health care matters. According to the plea agreement, Huang defrauded health care benefits programs through the submission of false claims for reimbursement. For example, Huang submitted reimbursement requests for acupuncture treatment where the patient either received no care at all, no acupuncture treatment, or received acupuncture for a much shorter period of time than what was billed. Huang also submitted reimbursement claims for services when patients had not been seen by Huang, including days that Huang was not even in the state.

Read the DOJ Press Release here.

Pennsylvania Doctor Agrees to Pay $2.8 Million to Resolve Health Care Fraud Allegations Concerning 'Goodie Bags' Of Drugs

Pennsylvania doctor Andrew Berkowitz agreed to pay $2.8 million in civil damages and penalties under the False Claims Act, Controlled Substances Act, and in civil forfeiture, according to a proposed consent judgment. The proposed consent judgment, if approved by the court, would resolve a civil lawsuit filed against Berkowitz alleging his participation in health care fraud and the improper distribution and dispensing of controlled substances, In addition to the monetary fine, Berkowitz also agreed to a 20-year exclusion from participating in Medicare and Medicaid programs and agreed to be permanently barred from prescribing, distributing, or dispensing any controlled substances in the future and from ever seeking another controlled substance registration from the Drug Enforcement Administration.

Berkowitz is alleged to have developed and participated in a scheme to dispense prescription drugs and controlled substances, referred to as “goodie bags,” to every patient whose insurance would cover the drugs. Berkowitz allegedly submitted claims for reimbursement falsely asserting that the drugs were medically necessary, despite not making any meaningful assessment as to whether the drugs had a legitimate medical purpose. In exchange for the submission of excessive claims for medically unnecessary prescription drugs and services not rendered, Berkowitz is alleged to have prescribed oxycodone to “pill-seeking” patients.

The civil lawsuit contains only allegations but notes that Berkowitz admitted to the allegations when he pleaded guilty in a criminal case on January 24, 2020, to 20 counts of health care fraud and 23 counts of distribution of a controlled substance outside the scope of professional practice and without a legitimate medical purpose. Berkowitz agreed to pay $3.5 million in criminal restitution and awaits sentencing while in custody.

Read the DOJ Press Release here.