National Health Care Fraud and Opioid Takedown

By: Jeffrey Lynne October 2, 2020 6:43 am

Time to read: 5 Minutes

Under the headlines “National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More than $6 Billion in Alleged Fraud Losses” and “Largest Health Care Fraud and Opioid Enforcement Action in Department of Justice History,” the US Department of Justice announced on September 30^th a second nationwide enforcement action involving 345 persons charged across 51 federal districts, including more than 100 doctors, nurses, and other health care professionals.

While the bulk of the arrests were for fraud involved with telemedicine (the use of telecommunications technology to provide health care services remotely) and testing, including unnecessary genetic testing, a noteworthy number of arrests pertained directly to the addiction treatment industry.

According to the press release:

The “sober homes” cases announced today include charges against more than a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction.  The subjects of the charges include physicians, owners and operators of substance abuse treatment facilities, as well as patient recruiters (referred to in the industry as “body brokers”).  These individuals are alleged to have participated in schemes involving the payment of illegal kickbacks and bribes for the referral of scores of patients to substance abuse treatment facilities; those patients were subjected to medically unnecessary drug testing – often billing thousands of dollars for a single test – and therapy sessions that were frequently not provided, and which resulted in millions of dollars of false and fraudulent claims being submitted to private insurers.  Medical professionals also allegedly prescribed medically unnecessary controlled substances and other medications to these patients, sometimes to entice them to stay at the facility.  The patients were then often discharged and admitted to other treatment facilities, or referred to other laboratories and clinics, in exchange for more kickbacks.

In the Southern District of Florida, 34 defendants were charged across 3 cases for their roles in schemes to defraud insurance programs out of more than $1 billion, money laundering offenses, kickback (EKRA and Anti-Kickback Statute) schemes, and other fraud offenses.  For example, the largest addiction treatment fraud case against a doctor ever brought was charged in connection with more than $681 million in false and fraudulent billings for medically unnecessary urine drug tests and blood tests, psychiatric testing, prescription drugs, and other services, which resulted in payments of approximately $121.9 million.

These cases are:

• United States v. Dr. Mark Hernandez (Safe Haven Recovery, Inc.; EKRA violations)
• United States v. Markovich, et al (Compass Detox) (Conspiracy to violate EKRA)
• United States v. Dr. Michael Ligotti (Whole Health, LLC; medical director for many South Florida providers)

Another case of note is United States v. Tarek Greiss out of the Central District of California (Costa Mesa) (using marketing agreements as a sham to cover up kickbacks and prosecuted under EKRA).

What is particularly newsworthy is the governments relatively new application of the “Eliminating Kickbacks in Recovery Act of 2018” or “EKRA”, 18 USC s. 220 (“Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories”).  Before now, only one (1) prosecution had been brought under this recently adopted criminal statute that has many parallels to the federal Anti-Kickback Statute (AKS) and for those familiar, Florida’s Patient Brokering Act.  We will continue to follow these EKRA cases as they are prosecuted and defended in the courts which will shape how addiction medicine and recovery support services for many years to come.

A description of each case brought can be found here.

NOTE: A complaint, information or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.