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The DOJ is cracking down on healthcare fraud. Don’t put your practice at risk.


A recent False Claims Act settlement and a healthcare fraud takedown in Texas highlight the need for compliance and vigilance.

healthcare fraud, DOJ, False Claims Act, penatlies, physician

Adiru ch na Chiangmai / Adobe Stock

The United States Department of Justice (DOJ) and state attorneys general are not going to stop enforcing healthcare fraud anytime soon. The ramifications to the bad actors, both individuals and corporations, can be significant in terms of both civil liability and criminal liability. As Erin Nealy Cox, U.S. Attorney for the Northern District of Texas stated, “[h]ealthcare should revolve around patients’ well-being - not providers’ personal interests.”

U.S. Attorney Nealy’s comment highlights several items. First, provider reimbursement is continuing to transition toward patient outcomes, a concept that has been evolving since passage of the Affordable Care Act. Therefore, incentives should be aligned between providers and patients. Despite this notion, 58 individuals across all four federal districts in the state of Texas were arrested in connection with a Medicare fraud scheme related to opioids, which resulted in 6.2 million pills being dispensed and costing Medicare $66 million. Of the 58 individuals, 16 were medical professionals and 20 were charged for participating in the diversion of opioids.

Ryan K. Patrick, U.S. Attorney for the Southern District of Texas, said that “[w]hat is new, is the reinforced fight being taken to dirty doctors and shady pharmacists. Texas may have four U.S. Attorneys, but we are focused on one healthcare mission: shutting down pill mills and rooting out corruption in healthcare.”

Most healthcare fraud is not as sensational as drug diversion and prescribing habits that result in a multi-district, coordinated round up. For example, in Florida, the DOJ announced that a compounding pharmacy, its owners and the private equity firm that managed and controlled daily operations settled a False Claims Act case for $21.36 million to resolve allegations of a kickback scheme to generate referrals for expensive pharmaceuticals and supplements.

The case, which was brought by a whistleblower, also underscores that kickbacks, another type of healthcare fraud, continue to be pursued by the DOJ because of the adverse impact on the Treasury and the taxpaying citizens of the United States. By exploiting the TRICARE program, which serves military members and their families for prescriptions of compounded creams and vitamins, the cost of providing care was driven up to the detriment of service members, their families and the government.

In sum, these two actions by the DOJ should remind physicians and other providers to review their current policies and procedures as well as actual practices. Doing so could significantly limit their possible civil and criminal liability.

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website,

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