Whistleblower lawyers have requested that the Department of Justice establish a task force to fight coronavirus related health care fraud according to Bloomberg Law. One of the unfortunate but predictable responses to a national crisis is that criminals will try to take advantage. For instance, Hurricane Katrina, and the financial crisis saw fraudsters try to take advantage of the crisis. It will almost certainly happen here as well.
The government has responded to crises like this before by establishing specialized task forces to attack specialized fraud. Thus, the government established a nursing home fraud task force to fight a rising form of fraud. We think a such an approach makes sense here.
Watch Out for Coronavirus Testing Fraud
Our partner Bob Thomas recently sounded the alarm for genetic testing fraud. Groups of criminals call seniors. They then invite them to take “free” tests to screen them and their family for propensity for cancer. The criminals then bill the government for these tests and lie about the patient’s condition to justify payment.
With coronavirus, we’d expect to see something similar. Now that Congress has allocated funds to ensure tests without copayment, we expect aggressive fraudsters will use similar networks to push “free” testing on populations who are not priorities for the important test, and may not have any medical need for it at all. Genetic testing fraud merely drains federal funds that could better be used to help the sick. However, Coronavirus testing fraud runs the risk of misallocating scarce testing resources away from the areas they are most needed.
Watch Out for Coronavirus Pharmaceutical Fraud
We’ve repeatedly discussed the scourge of compounding pharmacies that craft “custom” compounds designed primarily based on their high reimbursement rates rather than patient needs. We would expect to see similar schemes that peddle expensive compounds of questionable effectiveness. Similarly, while it is important that the government and doctors be able to use drugs in novel ways to treat new diseases like coronavirus, beware of sales people using the crisis to make unfounded claims about their products.
Watch Out for Coronavirus Price Gouging
We have handled a number of cases involving vendors seeking to dramatically raise the prices of their products to extract large sums from the government. Most recently the government intervened in our case against Mallinckrodt for doing just this while raising the price of its drug from under $1 to over $40,000 per dose. Be careful of vendors who seek to take advantage of this crisis by dramatically raising their prices for drugs and supplies including masks, gowns, gloves, etc.
March 23rd Update:
DOJ has responded to the increased risk of COVID-19 fraud. On Friday, March 20, Attorney General William P. Barr directed the public to report Coronavirus fraud. Individuals can do so by calling the National Center for Disaster Fraud (NCDF) hotline at 1-866-720-5721 or by e-mailing the NCDF at disaster@leo.gov.
The AG also directed U.S. Attorneys to prioritize the investigation and prosecution of Coronavirus-related fraud schemes. Each U.S. Attorney will appoint a Coronavirus Fraud Coordinator to serve as a point-person for fighting this fraud.
DOJ has identified examples of likely Coronavirus Fraud including:
- Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud.
- Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
- Malicious websites and apps that appear to share Coronavirus-related information to gain and lock access to your devices until payment is received.
- Seeking donations fraudulently for illegitimate or non-existent charitable organizations.
- Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.
March 31 Update:
Health and Human Services Office of Inspector General (HHS-OIG) issued a Fraud Alert about fraud schemes related to the novel coronavirus (COVID-19).
In that alert, HHS-OIG notes that fraudsters offer COVID-19 tests to Medicare beneficiaries in exchange for personal details, including Medicare information. These services are unapproved and illegitimate. These scammers are reaching out to individuals through telemarketing calls, social media platforms, and door-to-door visits.
HHS-OIG wants to remind individuals to protect themselves:
- Beneficiaries should be cautious of unsolicited requests for their Medicare or Medicaid numbers.
- Be suspicious of any unexpected calls or visitors offering COVID-19 tests or supplies. If your personal information is compromised, it may be used in other fraud schemes.
- Ignore offers or advertisements for COVID-19 testing or treatments on social media sites.
- A physician or other trusted healthcare provider should assess your condition and approve any requests for COVID-19 testing.
- If you suspect COVID-19 fraud, contact National Center for Disaster Fraud Hotline (866) 720-5721 or disaster@leo.gov
Conclusion
In this time of crisis, it is important that we all pull together. That includes making sure criminals do not use the crisis as an opportunity to profit from the fear and uncertainty. We will continue to look out for and fight fraud related to this crisis.
