New DOJ Health Care Fraud Unit Secures Six Trial Convictions Totaling Over $1.1 Billion

New DOJ Health Care Fraud Unit Secures Six Trial Convictions Totaling Over $1.1 Billion

The US Department of Justice (DOJ) announced on June 4 that the National Fraud Enforcement Division’s Health Care Fraud Unit secured six federal jury trial convictions in under three weeks, spanning five federal districts and six distinct fraud schemes totaling more than $1.1 billion in losses. The cases, tried between May 13 and June 1, included the conviction of HealthSplash founder Brett Blackman for orchestrating a $1 billion telehealth platform that used foreign call centers to pressure elderly Medicare beneficiaries into accepting unnecessary orthotic braces. Other convictions targeted a Los Angeles physician who billed more for Medicare Botox injections than any other provider in the country — including on days her clinic was closed and while she was on vacation — a Michigan home health nurse who paid kickbacks via a peer-to-peer mobile payment application using stolen patient identities, a Brooklyn, New York, substance abuse clinic owner whose patients sold narcotics from a van parked outside the facility, a physical therapy clinic manager who paid ambulette drivers for patient referrals and falsified therapist records, and a Tennessee nurse practitioner who prescribed nearly one million opioid pills to roughly 1,000 patients. Assistant Attorney General Colin McDonald said the results reflect “not only our ability to proactively detect, investigate and dismantle fraud schemes before they cause further harm, but the depth and skill of the trial lawyers who carry those cases across the finish line.” 

The DOJ’s press release is available here.

Medical Network Enters $56.5 Million Medicare Advantage Settlement 

The DOJ announced on June 3 that Matrix Medical Network, its subsidiary HealthFair, and HealthFair founder Shahriah Ekbatani will pay $56.5 million to resolve two whistleblower suits alleging they submitted unsupported diagnoses from Medicare Advantage patient assessments to inflate risk-adjusted payments from the Centers for Medicare & Medicaid Services. Matrix admitted that some reported conditions lacked sufficient clinical documentation. HealthFair, for its part, was accused of making diagnoses that directly contradicted test results, including findings of congestive heart failure and arrhythmias in patients whose tests showed no such conditions. The two relators will receive a combined $10.9 million.

The DOJ’s press release is available here.

Massachusetts Attorney General Files $100 Million State FCA Suit Against UnitedHealthcare

On May 29, the Massachusetts Attorney General filed a state False Claims Act (FCA) suit accusing UnitedHealthcare of overcharging MassHealth by more than $100 million through its Senior Care Organization program. According to the complaint, the insurer used copy-pasted clinical assessments and added undocumented behavioral health claims to push patients into higher payment tiers. When an internal review caught some of the miscategorizations, UnitedHealthcare allegedly downgraded the affected members without disclosing the issue to the state or refunding the difference. The state is seeking treble damages. UnitedHealthcare has called the complaint “meritless.”

The case is captioned Commonwealth of Massachusetts v. UnitedHealthcare Insurance Co. (Mass. Sup. Ct.).

Ninth Circuit Declines to Rehear 340B FCA Ruling 

The Ninth Circuit on May 28 declined to rehear its March decision allowing Adventist Health System to pursue an FCA qui tam suit against AbbVie, AstraZeneca, Novartis, and Sanofi over alleged overcharging under the 340B drug discount program. The pharmaceutical defendants argued that FCA qui tam provisions are unconstitutional and that the Health Resources and Services Administration holds exclusive authority over pricing disputes, but the full court did not bite. The ruling keeps open a potentially significant channel for hospitals to challenge 340B pricing conduct through the FCA, even where the government declines to intervene. 

The case is captioned United States ex. Rel. Adventist Health Sys. of West v. Abbvie, Inc., No. 24-2180 (9th Cir.).