HealthCare Fraud Prosecutorial Trends in 2024: Predictions Based Upon Latest OIG DOJ Enforcement Report

Money and health care and crime: the topics are intertwined. The amount of money spent in the health care industry here in the United States is almost impossible to comprehend.  It is reported that in 2021, 17.8% of the entire gross domestic product (GDP) of our country was spent on health care.  This is two, three, or even four times the amount spent on health care in places like Japan, Germany, New Zealand, the United Kingdom, France, and Canada. Read, “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes,” written by Munira Z. Gunja, Evan D. Gumas, and Reginald D. Williams II and published by The Commonwealth Fund on January 31, 2023.

Of course, money is a big (huge) factor in health care fraud investigations and prosecutions.  It’s something that cannot be ignored by experienced criminal defense attorneys representing those charged with various forms of health care fraud.

Consider this:  in February 2023, the Department of Justice (“DOJ”) issued a press release touting that within a single year (FY2022), the DOJ had reached the “Second-Highest Number of Settlements in History,” with a tally that “exceeded $2.2 Billion.”  Most of this amount came from health care fraud cases where “…recoveries restored funds to federal programs such as Medicare, Medicaid, and TRICARE ….”

• See: Health Care Fraud Defense: Arrests Based Upon Medicare, Medicaid, or TriCare Insurance Claims.

This leads us to a consideration of future health care fraud investigation and prosecution targets in terms of health care practitioners, practices, and providers, as well as the legal bases for criminal action.  As a criminal defense lawyer representing medical professionals, I suspect that there will be more and more efforts made to arrest and charge all sorts of health care providers with health care fraud in the coming years.

To confirm those suspicions we turn to the latest DOJ report, co-authored with the Department of Health and Human Services (“HHS”), entitled the “Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2022” (“DOJ Report”).

• Read the entire 135-page report online here.

The DOJ Report shares information on federal prosecutions of health care fraud in the United States.  It details the latest efforts of the Inspector General’s Health Care Fraud and Abuse Control Program (“HCFAC”), which has been at work for the past 25 years in a coordination of “…Federal, state, and local law enforcement activities with respect to health care fraud and abuse.” DOJ Report, page 1.

A Solid Return on Investment

According to the DOJ Report, “…[t]he return on investment (ROI) for the HCFAC program over the last three years (2020–2022) is $2.90 returned for every $1.00 expended.” DOJ Report, page 8.

Calculation details of the HCFAC Program’s ROI, including sources of funding and disbursements, are found on page 132 of the DOJ Report.

Investigations and Prosecutions: Things We Know

From the DOJ Report, several lessons can be learned regarding future health care fraud investigations and prosecutions in Texas and the rest of the country.  Criminal defense lawyers whose work includes representing medical professionals in these cases understand that there may be more and more of these types of cases filed in federal court.

• Also read: Doctor’s Risk Of Arrest: Popular Bases For Texas Health Care Fraud Prosecutions.

1. Driven by HCFAC Data Analytics

It’s not a secret that these legal actions begin in a database.  The DOJ Report explains that health care fraud investigations and prosecutions develop from “advanced data analytics” (see, e.g., DOJ Report pages 8, 65, 78) that monitor all sorts of things in order to determine and define high risk areas for fraudulent activities as well as things like waste.  The analysis applies to both public and private providers of medical services and health care.

2.  Most Investigations Turn Into Prosecutions

In FY2022, the DOJ opened 809 new criminal health care fraud investigations, and 419 criminal prosecutions were subsequently filed involving over 680 defendants. Fraud convictions came for 477 of these defendants.  This does not include any civil matters.  That same year, the HHS’s Office of the Inspector General also undertook investigations that resulted in 661 criminal actions based upon health care fraud involving Medicare and Medicaid.  Again, this does not include any civil cases filed in federal court alleging health care fraud. DOJ Report, page 1.

The lesson here?  If someone believes they may be in the sights of any federal investigation into health care fraud, then there is a significantly serious likelihood that they are going to be facing health care fraud charges in federal court.

From a criminal defense perspective, it is simply never too early to begin an aggressive criminal defense strategy if any health care provider or practitioner has the tiniest fear that they have come into the sights of health care fraud investigators.

• For more, read: Federal Investigations: Target Letters, Proffers, And Plea Deals.

3.  Likely Targets of Investigation: 13 Types of Providers and 8 Kinds of Care or Treatment

Of course, the federal agents and prosecutors are free to delve into any area of alleged fraudulent activity defined by law.  However, the DOJ Report gives guidance into repeated activities that appear to provide us with a list of likely enforcement actions (criminal and civil) based upon their past actions. DOJ Report, pages 15-36.

A. Providers

1. Drug Companies
2. Durable Medical Equipment Manufacturers or Suppliers
3. Home Health Providers
4. Hospices
5. Hospitals and Health Systems
6. Medical Clinics
7. Medical Device Manufacturers or Suppliers
8. Nursing Homes and Facilities
9. Pharmacies
10. Psychiatric and Psychological Services (Psychiatrists, Psychologists, LPCs, etc.)
11. Physicians and Other Practitioners
12. Substance Use Treatment Centers
13. Telemedicine Companies.

B. Care or Treatment

1. COVID-19 Matters
2. Diagnostic Testing
3. Genetic / RPP Testing
4. Laboratory Testing
5. Managed Care
6. Physical Therapy
7. Prescription Drugs And Opioids
8. Psychiatric and Psychological Testing.

4.  Investigations Come From Various Fronts

Criminal defense lawyers understand that not only are certain providers more likely to become clients as they are investigated and/or prosecuted for health care fraud but that there are some types of medical care or treatment that tend to be more commonplace in HCF matters.

That’s not the only complication.  There is more than one cook in the kitchen.  For instance, opioid cases may have a designated AUSA unit involved that works solely on overprescribed or abused opioid cases.

And for the Dallas metroplex (along with San Antonio and the Rio Grande Valley), it also includes one of the 27 national Strike Force teams that have their life’s work as ferreting out criminal health care fraud in their assigned region.

A. The Health Care Fraud Prevention and Enforcement Action Team (HEAT)

Forecasting future federal health care fraud investigations and prosecutions has to include the impact of the Health Care Fraud Prevention and Enforcement Action Team (“HEAT”).  Created in 2009 by the Attorney General of the United States (as head of the DOJ) and the Secretary of the Department of Health and Human Services (HHS), HEAT exists to ensure the success of the HCFAC Program.

In sum, HEAT defines present and future enforcement initiatives as well as the areas for increased oversight and prevention regarding health care fraud.

How?  Members of HEAT are to “…build and strengthen existing programs combatting Medicare fraud, while investing new resources and technology to prevent and detect fraud and abuse.” DOJ Report, pages 11 – 12.

For instance, HEAT has “significant involvement” in state Medicaid Fraud Control Units (“MFCU”).  These are defined by the HHS as:

Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud as well as abuse or neglect of residents in health care facilities and board and care facilities and of Medicaid beneficiaries in noninstitutional or other settings. MFCUs operate in each of the 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. MFCUs, usually a part of the State Attorney General’s office, employ teams of investigators, attorneys, and auditors; are constituted as single, identifiable entities; and must be separate and distinct from the State Medicaid agency. OIG, in exercising oversight for the MFCUs, annually recertifies each MFCU, assesses each MFCU’s performance and compliance with Federal requirements, and administers a Federal grant award to fund a portion of each MFCU’s operational costs.

For more on MFCUs, read: Medicaid Fraud In Texas: Federal And State Prosecutions.

HEAT has also expanded the Health Care Fraud Strike Force program “…to include fraud by criminals masquerading as health care providers or suppliers.”  Id.

B. The Health Care Fraud Strike Force Teams

Another key player in any predictions of future health care fraud investigations and prosecutions here in Texas are the Health Care Fraud Strike Force Teams (Strike Force).  DOJ Report, page 8 – 11.

The job of each Strike Force team is to “…harness data analytics and the combined resources of Federal, state, and local law enforcement entities to prosecute complex health care fraud matters and prescription opioid distribution and diversion schemes.”  These are not just federal agents.  A Health Care Strike Force Team has investigators and prosecutors coming from various agencies and jurisdictions, working together in an “inter-agency” effort to “…focus on the worst offenders in regions with the highest known concentration of fraudulent activities.”  Id. 

Strike Force Teams get to use all those advanced data analytics compiled by the federal government with an eye to find evildoers in “health care fraud hot spots.”  If you are a provider of care or services in one of these areas, then there is a greater chance that a Strike Force Team is going to looking into your care services or business operations.

In Texas, there are currently three Strike Force Teams.  They are operating in:

1. Dallas;
2. Rio Grande Valley; and
3. San Antonio.

In Texas, the three regions where Strike Force Teams are at work must be considered as more likely to result in individuals and business entities facing criminal health care fraud charges. The coordinated efforts of these joint forces in health care fraud investigations cannot be underestimated.

In FY2022, Strike Force efforts resulted in the following:

• Filing 266 indictments, criminal informations and complaints involving charges against 392 defendants who allegedly collectively billed Federal health care programs and private insurers approximately $2.2 billion;
• Obtaining 395 guilty pleas and litigating 42 jury trials, with guilty verdicts against 48 defendants; and
• Securing imprisonment for 323 defendants sentenced, with an average sentence of over 53 months.

DOJ Report, page 10.

C. The Opioid Fraud and Abuse Detection Unit

For those involved in medical care or treatment involving opioids, it is important to know that there is the special Opioid Fraud and Abuse Detection Unit (“OFAD”) AUSA program that is on the job with the sole purpose of investigating and prosecuting “opioid-related health care fraud.”  And yes, this means “medical professionals,” not others that may be the subject of opioid criminal investigations outside of the health care industry.

As well as other organizations or agencies under the HCFAC banner, they have access to its accumulating data as a means to “…identify and prosecute individuals that are contributing to the prescription opioid epidemic.”  Charges may be based on a range of criminal violations that expand from health care fraud to include things like drug trafficking and money laundering.  DOJ Report, page 11-12.

Health Care Fraud Defense in Texas: Arrested for Health Care Fraud

From the latest DOJ report, we know the future looks bright for those employed with the job of rooting out health care fraud charges in the next few years.  Any endeavor with a return on investment of $2.90 returned for every $1.00 spent is far from being discontinued or culled back.

And from the viewpoint of a criminal defense attorney defending those being investigated or charged with health care fraud in Texas, there are clear warning flags being waived by law enforcement in the latest DOJ report which should not be ignored.

Particularly in Dallas, the Rio Grande Valley, and San Antonio, health care providers and practitioners must be vigilant that they may come into the sights of investigators looking into possible health care fraud.  We are aware that some individuals and entities as well as certain types of services may be more prone to investigation than others, as well. (See the above lists with the 13 types of providers and the 8 types of services.)

Not everyone investigated will be arrested, but even the hint of suspicion can be extremely harmful to both professional and personal reputations.  Health care fraud is a growing part of the federal prosecutor’s docket and a vigilant, perceptive, and experienced defense strategy can be invaluable in these matters.

Of particular importance: in federal cases, the accused will move through the federal criminal justice system where the United States Sentencing Guidelines will mandate punishment upon conviction.

For more on how the sentencing guidelines work, read:

• Federal Crimes and Sentencing Guidelines: Health Care Fraud
• When Businesses are Charged with Crimes: Organizational Offenders
• Loss Amounts in Federal Sentences: Calculating Economic and Financial Losses in Federal Felonies.

For more on health care fraud defense, read:

• Safe Harbor Defenses to Health Care Fraud Kickback Charges
• Health Care Fraud Arrests for Violation of Federal False Claims Act: Criminal Defense Overview
• Texas Health Care Fraud Arrests: The Physician Self-Referral Law aka Stark Law, a Criminal Defense Overview
• Texas Physicians’ Risk of Arrest: Criminal Defense Overview of Federal Anti-Kickback Statute (AKS)
• Medical Identity Theft: Texas Criminal Defense of Health Care Fraud Charges.

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For more information, check out our web resources, read Michael Lowe’s Case Results, and read his in-depth articles ”Pre-Arrest Criminal Investigations” and “How Criminal Charges Get Dropped in State and Federal Cases.”