DOJ Secures Convictions in $1.1 Billion Health Care Fraud Cases
The U.S. Department of Justice (DOJ) revealed that its Health Care Fraud Unit secured six federal jury trial convictions in under three weeks, spanning five federal districts with fraudulent activities valued at over $1.1 billion. From May 13 to June 1, these trials included the conviction of Brett Blackman, founder of HealthSplash. He ran a telehealth platform accused of exploiting elderly Medicare beneficiaries by promoting unnecessary orthotic braces, resulting in roughly $1 billion in defrauded Medicare claims.
Other convictions involved diverse fraudulent activities, such as a Los Angeles physician overbilling Medicare for Botox treatments, and a Michigan nurse alleged to have executed illegal payments via peer-to-peer apps using stolen patient identities. Additionally, a Brooklyn-based clinic operator was linked to unlawful narcotic sales, and a physical therapy clinic operator falsified records while improperly compensating drivers for patient referrals. A Tennessee nurse practitioner also faced conviction for excessively prescribing opioid pills, as Assistant Attorney General Colin McDonald highlighted the DOJ's effectiveness in dismantling these fraud schemes.
The DOJ also announced a settlement with Matrix Medical Network, its subsidiary HealthFair, and founder Shahriah Ekbatani, who agreed to pay $56.5 million over manipulated diagnoses to inflate Medicare risk-adjusted payments. This settlement followed allegations of insufficient clinical documentation and contradictory diagnoses, with whistleblowers set to receive $10.9 million from the resolution.
In state legal developments, Massachusetts Attorney General initiated a False Claims Act lawsuit against UnitedHealthcare. Accused of overbilling the state's MassHealth program by over $100 million through improper clinical assessments and undocumented claims, the lawsuit seeks triple damages. UnitedHealthcare has contested the allegations' validity.
Furthermore, the Ninth Circuit Court upheld Adventist Health System's ability to continue a False Claims Act suit against pharmaceutical companies AbbVie, AstraZeneca, Novartis, and Sanofi, alleging 340B drug pricing violations. Despite the defendants' constitutional and jurisdictional challenges, the court's decision maintains a litigation path for hospitals to address 340B pricing issues, even without government participation.