Even though the issue of healthcare frauds is not new at all, the pressure put on the healthcare system due to Covid-19 crisis has put a much-needed focus on this problem. As of now Medicare processes more than 4.5 million claims a day, and is a major target of fraudsters, along with the Provider Relief Fund that was created as part of the more expansive Coronavirus Aid, Relief, and Economic Security Act. Alongside these government relief programs; the instances of false and counterfeit claims are on the rise are also on the rise. Ken Julian mentions that examples of common healthcare frauds in today’s times include fraudulent vaccines, fake vaccination records, as well as the creation of a system of ‘kickbacks’ to physicians for lining the pockets of pharmaceutical companies and other healthcare providers.
With great power comes great responsibility. But unfortunately, many people use the power coming with their position for unscrupulous purposes. Ken Julian points out that a good number of healthcare frauds take place from within the system itself. As healthcare providers are in the ideal position to mimic legitimate schemes and transactions, many of them end up carrying out fraudulent activities alongside complicit doctors and other medical professionals who can manipulate or bypass internal controls. Being a partner of the health care litigation practice at Manatt, Phelps & Phillips, Ken has a good knowledge of diverse frauds and scams taking place within the healthcare industry. He further points out that as these frauds occur from within the system, they are often not easily detected. The Covid-19 crisis has exasperated this issue even more.
Just earlier this year, the United States Department of Justice indicted a Michigan woman with embezzlement of government property. She was alleged to have continued submitting claims for patients who did not qualify for home health services through a that was no longer in operation. Even though the facility in question had closed down sometime in early 2020, it continued collecting more than $1M in Medicare benefit payments, which were then used for personal expenses and gifts for family members.
Ken Julian further discusses a healthcare fraud of a larger scale, which involved Galena Biopharma Inc. According to him, the DOJ had announced that Galena Biopharma Inc. agreed to pay a civil penalty of more than $7.55M for the purpose of resolving allegations of violating the False Claims Act by issuing kickbacks to physicians and other healthcare providers. These kickbacks were issued to induce the physicians to prescribe Galena’s fentanyl-based drug, Abstral. As a part of the kickbacks, the company paid approximately $92K to a physician-owned pharmacy, while 85 free meals were given to the doctors and staff belonging to a high-prescribing practice. This is not the end. The Galena sales team members had even organized an ‘advisory board’, for which doctors and speakers were paid $5K and $6K, respectively, to attend.