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Labs in Court Weekly Roundup

by | Apr 26, 2022 | Articles, News, Open Content

False and fraudulent claims, particularly those relating to COVID-19 and telemedicine, made up most of the key enforcement actions announced by the DOJ this past week

Enforcement actions announced by the U.S. Department of Justice (DOJ) over the past week involving the health care industry all related to false and fraudulent claims and billing, with those involving COVID-19 and telemedicine featuring prominently. Here’s a quick summary of some of the key announcements:

April 19: Both the owner and supervising manager of Louisiana-based Positive Change Counseling Agency, which provides various mental health services, were sentenced in relation to a wire fraud and health care fraud scheme. According to a DOJ statement, the owner and operator of Positive Change submitted or caused to be submitted a total of $3.5 million in fraudulent claims to Medicaid for non-emergency transportation services and mental health rehabilitation that were never actually provided/rendered. The company’s supervising manager knew fraudulent claims had been submitted. Both employees pleaded guilty and are responsible for jointly repaying the $3.5 million and each will face prison sentences of various lengths in connection with the case.1

April 20: All 11 defendants charged two months ago in connection with a $300 million health care fraud scheme have pleaded guilty for their roles. The scheme involved several lab companies—including Reliable Labs LLC, Spectrum Diagnostic Laboratory, and Unified Laboratory Services—and their founders, who paid kickbacks to encourage medical professionals to order medically unnecessary lab tests. Those tests were then billed to federal health care programs, including Medicare. All of the defendants face prison time of varying lengths for their actions, with the shortest term being three years and the longest, faced by both the founder of Unified Laboratory Services and Spectrum Diagnostic Laboratory and the owner of a marketing firm that all three labs used to disguise the kickbacks, being 15 years.2 

April 20: The DOJ charged 21 defendants across nine federal districts for various COVID-19 related health care fraud schemes that allegedly resulted in more than $149 million in both theft from federally-funded pandemic assistance programs and false billings to federal programs. The various schemes included those relating to fake COVID-19 vaccination cards, telemedicine, and the use of patients’ personal information gathered from COVID-19 testing samples to bill Medicare for unrelated tests or services that were not actually provided.3

April 21: A New York physician was charged for his role in an alleged $10 million health care fraud scheme in which he is said to have submitted false and fraudulent claims to Medicare and Medicare Part D related to medically unnecessary durable medical equipment that he ordered or prescribed via telemedicine visits. However, the physician allegedly never physically examined the beneficiaries and also received kickbacks and bribes relating to the claims.4


  1. https://www.justice.gov/usao-wdla/pr/owner-counseling-agency-and-supervising-manager-sentenced-healthcare-and-wire-fraud
  2. https://www.justice.gov/usao-ndtx/pr/11-defendants-plead-guilty-300-million-healthcare-fraud
  3. https://www.justice.gov/opa/pr/justice-department-announces-nationwide-coordinated-law-enforcement-action-combat-health-care
  4. https://www.justice.gov/opa/pr/physician-indicted-10-million-health-care-fraud-scheme