The Department of Justice recently announced a new group that will target healthcare fraud schemes in some Western states.
Through DOJ's National Fraud Enforcement Division, the new West Coast Health Care Fraud Strike Force will zero in on fraud, waste and abuse in Arizona, Nevada and Northern California, bringing together the U.S. Attorney's Offices in those regions with the DOJ's Health Care Fraud Section.
Aggressive action across the three districts is "urgent and undeniable," DOJ stated in the press release Thursday.
DOJ said the strike force approach has been effective at stopping healthcare fraud schemes, resulting in the collective prosecution of over 6,200 defendants who billed federal healthcare programs and private payers for over $45 billion.
The approach has been in place for nearly two decades, leveraging advanced data analytics and specialized, multidistrict teams to identify and prosecute major healthcare fraud. The strike forces operate in nine other regions, including the Northeast, Florida, Texas and the Midwest. DOJ also recently expanded the approach in Massachusetts.
DOJ is applying the strike force model on the other end of the country after data showed a recent uptick in healthcare fraud in the three districts.
A key area within the new strike force's jurisdiction is Silicon Valley, which "has become ground zero for technology-driven health care fraud schemes," according to U.S. Attorney General for the Northern District of California Craig H. Missakian.
Silicon Valley is one of the country's most significant healthcare technology hubs. The new strike force will provide better federal enforcement resources there and to the districts of Arizona and Nevada, where fraud schemes migrated to from Northern California, DOJ stated.
"Driven by data showing a significant and accelerating increase in health care fraud across all three districts, the Strike Force builds on a foundation of recent landmark prosecutions -- including the successful prosecution of digital health technology executives in the Northern District of California and the dismantling of Medicaid, sober home, and wound care fraud schemes in the District of Arizona," said Assistant Attorney General Colin McDonald of the DOJ's Fraud Division.
The strike force will also coordinate with the HHS Office of the Inspector General, FBI, DEA and other law enforcement agencies to coordinate actions against healthcare fraud, waste and abuse.
A record year for healthcare fraud takedowns
Last year set a record for healthcare fraud enforcement. DOJ reported the largest-ever national healthcare fraud takedown, resulting in criminal charges against 324 people and alleged losses exceeding $14.6 billion. The previous record was just $6 billion.
The takedown included significant cases in the districts of Arizona and Nevada, where seven people, including five medical professionals, engaged in a $1.1 billion fraud scheme for amniotic wound allografts. DOJ pointed to this case as one of the instances of growing fraud on the West Coast.
Another case in Northern California from November involved leaders of a digital health company going to prison for their roles in a years-long scheme to illegally distribute Adderall and other stimulants, then submitting fraudulent claims for reimbursement.
The Trump administration has made healthcare fraud enforcement a top priority in its second term. The administration has focused significantly on rooting out fraud, waste and abuse in the Medicaid program, with a close eye on home care and hospice.
Last week, CMS Administrator Mehmet Oz, M.D., announced the pause of $91 million in federal Medicaid funding to Minnesota, saying its state Medicaid program "has shown serious vulnerabilities to fraud." This builds on $250 million in Medicaid deferments to Minnesota earlier this year.
The federal government is planning more probes of state Medicaid programs, including those in California and New York. CMS is also now requiring all states to revalidate providers in an effort to curb fraud in high-risk areas, such as home health, nursing homes and hospice.
"CMS is done trying to catch fraudsters with their hands in the cookie jar -- instead, we're padlocking the jar and letting them starve," Oz said in February. "This proactive approach will help us crush fraud, protect taxpayer dollars, and make sure the vulnerable Americans who depend on our programs get the care they need."
Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.
