DOJ, Medicare Crack Down on Over $143 Million in COVID-19 Healthcare Fraud Schemes; Is Your Healthcare Practice Staying Compliant?

Doctor giving Covid-19 Vaccination

Medical Providers Are Charged with COVID-19 False Claims, Fraudulent Telehealth, and Kickbacks for Medically Unnecessary Tests. Don’t Be the Next One.

The Department of Justice (DOJ) just issued a harrowing reminder to healthcare providers that have been submitting claims for Coronavirus-related testing and health services since the COVID-19 pandemic began: You’d better make sure these claims are real.

That’s because the DOJ on May 26, 2021, announced criminal charges against 14 defendants suspected of Coronavirus-related health care fraud schemes that resulted in more than $143 million in false claims. Nearly $82 million of those claims stem from testing laboratories and services in South Florida (Palm Beach and Coral Springs), while other alleged scams come from CARES Act scams in California (Los Angeles, Los Altos, Burbank), and fake testing, money laundering, and wire fraud in the New York City region (Forest Hills, Queens, Staten Island).

On top of that, more than 50 national medical providers are being investigated by the Center for Program Integrity at the Centers for Medicare & Medicaid Services (CMS) for alleged involvement in health care fraud schemes “designed to exploit the COVID-19 pandemic.”

An example, according to the DOJ:

[M]ultiple defendants offered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests.

In some cases, and as alleged, the COVID-19 test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary care doctors.

South Florida Suspects in Palm Beach, Coral Springs, Boca Raton Charged with $73 Million in COVID-19 Telehealth Scams

In April 2020, the U.S. Attorney for the Southern District of Florida set up a COVID-19 Task Force to identify, investigate and prosecute Coronavirus fraud throughout the region. The DOJ’s recent roundup includes two major cases of such fraud from South Florida:

    • Two Palm Beach County men are alleged to have orchestrated a $73 million conspiracy for health care kickbacks. Michael Stein, owner and operator of purported consulting company 1523 Holdings, LLC, and Leonel Palatnik, an owner and operator of Texas-based lab company Panda Conservation Group, LLC, allegedly exploited temporary COVID-19 waivers of telehealth restrictions by offering telehealth providers access to Medicare beneficiaries for whom they could bill consultations. In exchange, these providers agreed to refer beneficiaries to Panda’s laboratories for expensive and medically unnecessary cancer and cardiovascular genetic testing.
    • Juan Nava Ruiz and Eric Frank, of Coral Springs, and Christopher Licata, of Boca Raton, are charged with involvement in an alleged $9.3 million health care kickback scheme. Licata, owner of clinical laboratory Boca Toxicology, LLC, is alleged to have offered and paid kickbacks to patient brokers, including Ruiz and Frank, in exchange for referring Medicare beneficiaries to Boca Toxicology for various forms of unnecessary genetic and other testing. This included $422,748 in claims related to medically unnecessary respiratory pathogen panel testing and genetic testing that was improperly bundled with COVID-19 testing.

In California, Misappropriated CARES Act Funds Along with $70 Million in COVID-19 False Testing Claims and Kickbacks

Meanwhile, in California:

    • Petros Hannesyan, of Burbank, is charged with the theft of government property and wire fraud in connection with $229,454 that he obtained from COVID-19 relief programs. Hannesyan, the owner of a Los Angeles home health agency, allegedly misappropriated funds from the CARES Act Provider Relief Fund and submitted false loan applications and a false loan agreement to the Economic Injury Disaster Loan Program.
    • Mark Schena, of Los Altos, is alleged to be in connection with over $70 million in submitted false and fraudulent claims for allergy and COVID-19 testing. His counts include health care fraud, conspiracy to pay kickbacks, and payment of kickbacks in connection with false and fraudulent statements about the existence, regulatory status, and accuracy of a COVID-19 test.

If Your Practice is Under Suspicion for COVID-19 Fraud, Our Healthcare Fraud and Criminal Law Lawyers Are on Your Side

As we at Chapman Law Group advised upon the start of the COVID-19 pandemic, a health-related occurrence of this magnitude opens the door to scams of all kinds, and the government would be looking first and foremost to healthcare providers eager to exploit such an opportunity.

And, as the South Florida Task Force and other federal COVID-19 task forces launched, we also stressed that all suspected schemes to defraud Medicare and other government programs will be taken seriously. This recent report from the DOJ is proof.

The Chapman Law Group health care fraud and healthcare-based criminal defense attorneys are here to advise your healthcare practice on what to do should any federal agent (DOJ, DEA, FBI, etc.) or governmental entity ask you about health care fraud or scams related to COVID-19.

Need an Attorney? Contact us now!

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Ronald W. Chapman II, LL.M.
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Chairperson of White Collar Defense & Government Investigations

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