Aftershocks of the Feds’ Big Bust: Lessons Learned

Once a year, for the past eight years, the U.S. Attorney General has announced his or her annual healthcare fraud enforcement efforts in the form of the U.S. Department of Justice’s (DOJ) “National Health Care Fraud Takedown.”  The Takedown, which compiles the year’s healthcare fraud-enforcement actions, is a reflection of the DOJ’s healthcare fraud-enforcement priorities. This year’s Takedown is notable in both its size and its emphasis. 

A DOJ graph and map tracking the number of defendants charged and federal districts participating in healthcare fraud-enforcement actions show a steady rise in both between 2013 and present. The facts culminating in this year’s takedown with charges against an impressive 412 individuals, responsible for $1.3 billion in fraud losses, across 41 federal districts.  

Unlike previous years, however, the 2017 takedown shows that the DOJ and its partners in the Medicare Fraud Strike Force have targeted medical professionals who have contributed to the opioid epidemic.  Of the 412 defendants charged, 120 (or 34 percent) were charged with crimes involving opioid prescription and/or distribution or the treatment of opioid addiction. 

In his remarks at last week’s press conference, Attorney General Sessions noted that this was “the largest opioid-related fraud takedown in American history.” 

The U.S. Department of Health and Human Services Secretary (HHS), Thomas Price, MD, described the opioid epidemic as a “national scourge” and noted that the emphasis of this year’s national takedown operation was on “aggressively targeting individuals who have maliciously contributed to America’s opioid epidemic while also engaging in healthcare fraud.”

Of the 412 defendants targeted in the takedown, Attorney General Sessions only highlighted three defendants in his remarks, and all of them were charged with opioid-related fraud.  A closer look at each of these cases shows the ways in which healthcare professionals have contributed to the opioid epidemic and how DOJ is seeking to stem the tide by deterring this conduct.  The first two cases involve the improper prescription and/or distribution of opioids whereas the third case involves fraud arising from the treatment of individuals suffering from opioid addiction. 

Improper Prescription and Distribution of Opioids

The first case, starting with the most brazen alleged conduct, hails from the U.S. Attorney’s Office in the Southern District of Texas.  The defendants in that case, Ms. Craig, a doctor, and Mr. Faithful, the owner of the pain clinic where Craig worked, were indicted for running a pill mill in Houston, Texas. 

Dr. Craig was accused of distributing 12,000 opioid prescriptions without a legitimate medical purpose, which translated to more than 2 million doses of the painkillers.  Dr. Craig and Mr. Faithful are alleged to have hired armed security guards who told patients to turn off their cell phones before entering the pain-management clinic.  Patients reputedly paid $300 up front for an appointment with Dr. Craig, although the visits were said to have typically lasted only a matter of minutes.  Reference: United States v. Gazelle Craig, D.O. and Shane Faithful, Case No. 17-CR-00319 (S.D. of TX). 

The second case comes from the U.S. Attorney’s Office for the Eastern District of Michigan, where six doctors were charged with operating a scheme in Michigan to prescribe patients with unnecessary opioids, among other conduct, allegedly resulting in an estimated $164 million in false claims.  Reference: United States v. Mashiyat Rashid et al., Case No. 17-CR-20465-Hood (E.D. of MI). 

Fraud in The Treatment of Opioid Addiction. 

The third case is a by-product of the opioid epidemic and involves fraud in the treatment of individuals suffering from opioid addiction.  The case comes out of the U.S. Attorney’s Office for the Southern District of Florida and involves defendants Eric Snyder, the owner of an addiction-treatment facility and a “sober home”/drug-free residence for patients undergoing treatment, and his consultant, Christopher Fuller, who is described as a “junkie hunter.” Fuller is charged with illegally recruiting patients for Snyder’s treatment facility and sober home.  Reference: United States v. Eric Snyder and Christopher Fuller, Case No. 17-MJ-8268-Brannon (S.D. of FL). 

One of the alleged fraud schemes involved improper billing of routine urine drug screens, which are an essential part of any drug-treatment program because they gauge a patient’s opioid use and success in the rehab program.  Mr. Snyder allegedly used the drug screens as a profit machine, double-billing for tests for the same patients at both the sober home and treatment facility and splitting samples to send them to different laboratories.  To cover up this scheme, Snyder allegedly commingled urine samples to prevent identical test results.

Snyder and Fuller were also charged with a scheme in which they allegedly paid illegal kickbacks to get individuals suffering from opioid addiction to attend Snyder’s drug-treatment center. Some of the kickbacks involved giving free rent at the sober home, which cost $200 per week, and, shockingly, giving out drugs and/or alcohol to people suffering from addiction and thereby further feeding their addiction. 

Together these fraud schemes are alleged to have resulted in an estimated $58 million worth of fraudulent medical insurance claims between 2011 and 2015.