Exclusive: U.S. coronavirus stimulus went to some
healthcare providers facing criminal inquiries
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[May 02, 2020] By
Sarah N. Lynch and Marisa Taylor
WASHINGTON (Reuters) - Eager to bolster the
healthcare system during the coronavirus pandemic, the U.S. government
last month sped $30 billion in stimulus payments to most healthcare
providers that billed Medicare last year.
That speed resulted in taxpayers' money flowing to some companies and
people facing civil or criminal fraud investigations, according to
defense lawyers and others representing more than a dozen firms and
people facing such inquiries.
The disclosures about such payments have prompted outrage among some
congressional Democrats, who say they highlight the problems with how
stimulus funds have been distributed.
"I have an enormous amount of frustration with the way the Trump
administration is distributing these dollars, and examples like these
magnify the consequences of the White House's efforts to limit
transparency and stonewall oversight," Senator Ron Wyden, ranking member
of the Senate Finance Committee, told Reuters.
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Henry Connelly, a spokesman for House of Representatives Speaker Nancy
Pelosi, added: "It is alarming to see the Trump administration giving
precious taxpayer dollars to unscrupulous entities while so many
hospitals and health care workers on the frontlines of the battle
against coronavirus are desperate for resources."
The Department of Health and Human Services, which sent the payments,
told Reuters it transmitted funds to all medical providers who submitted
billings in 2019 to Medicare, the federal health insurance program for
elderly and disabled Americans, unless they had already been excluded
from participating.
It declined to respond to the criticism from Wyden and Pelosi's office
and did not respond to specific questions from Reuters about the
payments.
Katherine Harris, a spokeswoman for the HHS Office of the Inspector
General, said her office oversees the program but declined to comment on
the specific distribution of funding.
"While we cannot comment specifically on any work other than what has
been publicly announced, I can tell you that we regularly perform
reviews of the department's administration of programs, including the
distribution of funding," Harris said.
Reuters was unable to independently determine what portion of the
stimulus payments went to entities and individuals involved in civil and
criminal actions with Medicare.
In an email to funding recipients seen by Reuters, HHS asked providers
to sign a lengthy attestation that stipulates they have been or will be
treating patients suffering from COVID-19, the disease caused by the new
coronavirus.
If providers do not respond within 30 days, HHS said it will assume they
have accepted the government's terms and conditions. It said in a
statement it "has mechanisms in place to recoup funds and address
fraudulent activity."
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The funds came from the $2.3 trillion CARES Act passed by Congress to
blunt the economic toll of the pandemic, which has killed more than
64,000 Americans and thrown at least 30 million people out of work.
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Oklahoma National Guardsmen wait to sanitize a residents room during
a decontamination mission at a longterm care facility, amid the
spread of the coronavirus disease (COVID-19), in McAlester,
Oklahoma, U.S. April 22, 2020. REUTERS/Nick Oxford
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Unlike the portions of that package intended to help small businesses, which
required companies to apply for it, some of the healthcare funding was initiated
by the U.S. Department of Health and Human Services and showed up as a surprise
in the bank accounts of many healthcare providers.
Reuters interviewed six defense lawyers and others representing more than a
dozen healthcare providers facing civil or criminal inquiries who received the
money, including a pain medicine doctor who recently settled a civil false
claims case, and an operator of an assisted living facility who is planning to
plead guilty to healthcare fraud.
"The left hand does not know what the right hand is doing," said Joel Hirschhorn,
an attorney who represents the pain medicine doctor and the operator of the
assisted living facility.
The lawyers who spoke to Reuters declined to identify their specific clients,
citing confidentiality rules.
The surprise deposit of funds has led attorneys to scramble to warn clients to
be ready to return the money.
"There is no such thing as a windfall from the government," said Sam J. Louis, a
former prosecutor who is now a partner with the law firm Holland & Knight, whose
law firm issued an alert to clients warning them of the potential of legal
liability in taking the funds.
Some former federal prosecutors say it would not have been difficult for HHS to
weed out these providers first.
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"If fraudulent providers, either convicted or under investigation, are receiving
CARES Act bail-outs automatically, without any vetting, then shame on the
government," said Paul Pelletier, one former prosecutor.
However, defense lawyers stressed that people charged with crimes are innocent
until proven guilty, and they are not usually barred from billing Medicare until
well after they are convicted of a crime. People facing criminal healthcare
charges usually agree to stop billing Medicare as a condition of their bond,
they added.
Another pool of practitioners eligible for the cash infusions include doctors
who have lost their medical licenses or licenses to prescribe highly addictive
drugs, said Ron Chapman, a lawyer in Miami.
HHS declined to say what portion of the $30 billion went to providers facing
criminal or civil inquiries.
It said it distributed funds to more than 315,000 provider billing organizations
reaching over 1.5 million healthcare providers.
In fiscal year 2019, investigations by the HHS inspector general's office led to
747 criminal actions and 684 civil actions.
(Reporting by Sarah N. Lynch and Marisa Taylor; Editing by Scott Malone and
Daniel Wallis)
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