Even before the Obama Administration’s Affordable Care Act, healthcare fraud was a huge issue in the United States. This problem only accelerated during the Covid-19 healthcare crisis.  Ken Julian mentions that while most people think of Enron, WorldCom, and Adelphi scandals when it comes to white-collar crimes, with the dominance of Covid-19 on media headlines, awareness about healthcare fraud cases has increased. The United States Department of Justice additionally has made investigations of healthcare frauds one of its major priorities.

As per the 2018 National Money Laundering Risk Assessment, frauds associated with healthcare were the largest source of illicit funds in the United States. It had more than $100B in proceeds, and accounts for over 35% of all illegal proceeds launched in the nation. Ken Julian says that a good amount of such corporate frauds is carried out by healthcare providers themselves, as they tend to be in the perfect position to mimic transactions that are legitimate along with complicit medical professionals who can easily bypass controls and manipulate records. Ken is a partner at the health care litigation practice at Manatt, Phelps & Phillips. He further points out that as a large chunk of healthcare frauds originates from within the system, their detection becomes quite complicated. The Covid-19 pandemic has additionally made the issue worse.

As of now, Medicare processes more than 4.5 million claims a day. The government focus is likely to increase on the people receiving benefits from the Provider Relief Fund, which was created as a part of the more comprehensive Coronavirus Aid, Relief, and Economic Security Act. Frauds associated with this relief program are quite high in number, in addition to instances of counterfeit claims.  The creation of a system of ‘kickbacks’ to fill up the pockets of pharmaceutical firms and other healthcare solution providers has also been observed, along with fake vaccination records and fraudulent vaccines themselves.

Citing an example, Ken Julian talks about how the United States Department of Justice indicted a Michigan woman with embezzlement of government property, while alleging that she had continued to submit claims for patients who didn’t qualify for home healthcare solutions through a facility that was no longer in operation. The home health facility in question had closed down in early 2020, but had continued to collect more than $1M as Medicare benefit payments. These payments were subsequently used for varying personal expenses, as well as a gift to members of the family.

Health care frauds, directly or indirectly, impact almost all people. Its impact becomes even more apparent during times of crisis, such as the Covid-19 pandemic, where numerous people across the nation are requiring healthcare solutions. The diversion of frauds owing to fraud increases the expenses associated with offering a full range of medical services to patients actually in need.  Re-defining of eligibility for programs such as Medicaid, reduction in benefit coverage, as well as greater premiums for individuals and their employers are just some of the ways healthcare frauds harm the populace, as a whole.