Apr 4, 2020

Federal and State Agencies Prioritize Coronavirus-related Fraud Schemes Amid the Ongoing COVID-19 Pandemic

Attorney General William P. Barr recently directed all U.S. Attorneys to prioritize the investigation and prosecution of Coronavirus-related fraud schemes. Unfortunately, it is commonplace for unscrupulous actors to take advantage of disasters to prey upon people’s fears and anxieties. With the Coronavirus (COVID-19) pandemic sweeping across the globe, many fraudulent schemes have already been reported, often times target the most vulnerable. These new schemes are wide ranging and indiscriminatory, targeting individuals and companies alike. Some examples that the Department of Justice have identified include:

  • Individuals and businesses selling fake cures for COVID-19 online.
  • Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
  • Malicious websites and apps that appear to share Coronavirus-related information to gain and lock access to your devices until payment is received.
  • Websites, such as GoFundMe and others, seeking donations for illegitimate or non- existent charitable and health organizations.
  • Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.

To combat the breadth of fraud and scams running rampant, state and federal law enforcement are assembling similarly broad law enforcement coalitions to respond. The Department of Justice has mandated each U.S. Attorney’s Office to appoint a Coronavirus Fraud Coordinator to direct the prosecution of Coronavirus-related crimes and to conduct outreach and awareness. And individual U.S. Attorney’s Offices are taking innovative action to target those seeking to take advantage of the current pandemic.

As U.S. Attorney Justin Herdman of the Northern District of Ohio has stated: “The Department of Justice is absolutely committed to bringing to justice those who would seek to take advantage of our friends, family, and neighbors during this challenging time . . . and if you’re a criminal seeking to capitalize on public misconceptions or fear, then you should know that we will find you and prosecute you.”

Across the border, the U.S. Attorney for Western District of Pennsylvania and Pennsylvania’s Attorney General have formed the first-in-the-nation joint federal and state task force committed to combatting COVID-19 fraud. West Virginia has followed Pennsylvania’s lead and created a similar joint task force.

Federal and state efforts to combat COVID-19 fraud are laudatory. The need for enforcement efforts in this area also may create challenges for legitimate health care providers and their employees at a time when doctors and nurses are courageously battling a difficult and largely invisible enemy. Due to the rapidly evolving nature of the current pandemic, medical providers have been forced to adapt quickly to the needs of their patients and communities. In recognition of the need for enhanced flexibility for providers during this national crisis, certain regulatory requirements have been relaxed. Even during this challenging time, however, it remains vital for providers to remain focused on regulatory compliance. Specifically, health care entities and individuals should consider, inter alia, the following during these unconventional times:

  • Make sure new contracts and arrangements, which may need to be entered into far more quickly than is the norm, comply with health care laws, including the Anti- Kickback Statute.
  • Ensure there is quality control procedures in place with newly produced personal protective equipment (“PPE”), medical devices, and pharmaceuticals.
  • Only bill claims for medically necessary goods and services.
  • Document good faith rationale for business decisions.
  • Safeguard patient information and keep patients aware of fraudsters posing as health service providers to persuade them to hand over passwords and other sensitive data.
  • Know who you are buying from: do your homework on third-party suppliers/contractors.
  • Keep up to date with local, state, and federal public health guidance.

Keeping these tips in mind should help health care providers remain compliant, ensure proper practice procedures, and assist in alleviating any additional anxiety or fear due to the Coronavirus. As the Coronavirus pandemic and related enforcement efforts continue, Flannery | Georgalis will continue to provide updates and analysis.