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Client Alert- COVID-19 Epidemic Presents New Opportunities for Health Care Fraud

May 11, 2020
  • FisherBroyles News

As the COVID-19 pandemic continues to impact the nation from coast to coast, federal and state governmental agencies have taken a number of measures to mitigate the financial strains to individuals due to widespread shelter-at-home orders and to speed resources and funding to the health care system through relaxed regulation and oversight.  While the necessity of these actions have been largely unquestioned, they have opened up a myriad of new angles of attack for those seeking to commit acts of fraud, both against consumers and against government funded health care programs. Consumers have been targeted with fake COVID-19 test kits and cures, fake COVID-19 charities, and scams related to stimulus checks. The government is also expecting an increase in payer-related fraud, waste, and abuse in the Medicare and Medicaid programs due to the relaxation of a number of rules and regulations for the delivery of care.

The potential for fraud, particularly of the consumer-facing variety, has not caught the government entirely flat-footed.  The US Attorney General, the Department of Health and Human Services Office of Inspector General, the Food and Drug Administration, and the Federal Trade Commission, along with the attorneys general in a number of states, have all issued alerts and memoranda and set up dedicated COVID-19 fraud websites notifying the public and directing the attention of law enforcement to a number of schemes to take advantage of consumer fears over COVID-19.  The most prevalent frauds have involved the marketing and sale of fake COVID-19 cures and tests.

Actions have followed these warnings. On May 7, the FTC issued 45 new warning letters to companies that are making unsubstantiated claims that their products and therapies can treat or prevent COVID-19. This is the fourth set of warning letters the FTC has announced to sellers of such products as part of its ongoing efforts to protect consumers from COVID-19 related scams. In all, the Commission has sent similar letters to almost 100 companies and individuals. The US Attorney General’s Office has also been active in taking enforcement actions related to COVID-19 fraud, including the arrest last week of a  New York resident charged with allegedly advertising and selling stolen COVID-19 testing services for $135 to $200, falsely claiming that he was connected to labs that would test the kits, shipping test kits without any prior medical screening, and providing no results to consumers. In another example, a former Port Angeles, Washington, naturopathic physician was charged in late April with a federal felony related to his attempts to promote a misbranded drug as a prevention for COVID-19.  There are many companies promoting the legitimacy of masks and antibody tests without obtaining the correct FDA approval or selling to persons for whom are not allowed to be sold or distributed the antibody test, as set forth in the FDA Emergency Use Authorization.

In terms of Medicare and Medicaid fraud, regulators expect that the worst is yet to come. In order to address the needs of consumers and health care providers alike, regulations have been relaxed in a number of areas, including reimbursement for offsite services, prior authorization requirements, telemedicine, ambulance services and more. While CMS has yet to take any direct action related to any fraud, waste, or abuse due to the relaxation of the regulatory scheme in many areas, providers should expect that as the emergency winds down, CMS and other regulators will be taking a closer look at activities during the pandemic via audits and investigations, particularly if accumulated data begins to reveal any outlier billing or other notable activity.

The FisherBroyles Pharmacy and Health Care Law team is pleased to keep those in the industry updated on topics of interest. Questions regarding the subject matter of this alert may be directed to any of the following attorneys:

Brian E. Dickerson  brian.dickerson@fisherbroyles.com    202.570.0248

Anthony J. Calamunci  anthony.calamunci@fisherbroyles.com   419.376.1776

Nicole Hughes Waid  nicole.waid@fisherbroyles.com   202.906.9572

Amy L. Butler  amy.butler@fisherbroyles.com   419.340.8466

 

About FisherBroyles, LLP

Founded in 2002, FisherBroyles, LLP is the first and world’s largest distributed law firm partnership. The Next Generation Law Firm® has grown to over 240 attorneys in 22 offices nationwide. The FisherBroyles’ efficient and cost-effective Law Firm 2.0® model leverages talent and technology instead of unnecessary overhead that does not add value to our clients, all without sacrificing BigLaw quality. Visit our website at www.fisherbroyles.com to learn more about our firm’s unique approach and how we can best meet your legal needs.

These materials have been prepared for informational purposes only, are not legal advice, and under rules applicable to the professional conduct of attorneys in various jurisdictions may be considered advertising materials. This information is not intended to create an attorney-client or similar relationship. Whether you need legal services and which lawyer you select are important decisions that should not be based on these materials alone.

© 2020 FisherBroyles LLP

 

About FisherBroyles, LLP

Founded in 2002, FisherBroyles, LLP is the first and world’s largest distributed law firm partnership. It has grown to over 240 people in 22 offices nationwide. The FisherBroyles’ efficient and cost-effective Law Firm 2.0® model leverages talent and technology instead of unnecessary overhead that does not add value to our clients, all without sacrificing BigLaw quality. Visit our website at www.fisherbroyles.com to learn more about our firm’s unique approach and how we can best meet your legal needs.

© 2020 FisherBroyles LLP