Laboratory Companies’ Unnecessary COVID-19 Testing at Nursing Homes Resulted in Fraudulently Billing Medicare

The U.S. Department of Justice (DOJ) remains focused on one of its top enforcement priorities for 2024: detecting, investigating and prosecuting COVID-related fraud cases. On July 18, DOJ announced it had obtained a $26 million False Claims Act default judgment against Annapolis-based laboratory companies and their owner.

Latest COVID-19-Related Fraud Enforcement Action

DOJ’s complaint, filed one year ago on July 18, 2023, alleged that Patrick Britton-Harr and multiple laboratory companies owned by him, including Provista Health, LLC, sought to illegally profit from the pandemic by offering medically-unnecessary COVID-19 tests to nursing home residents and then submitting those claims to Medicare.

Under the False Claims Act (FCA)—the DOJ’s primary tool for civil fraud enforcement—an entity’s knowing submission of a false or fraudulent claim can result in significant consequences and financial penalties.

DOJ alleged that Mr. Britton-Harr submitted more than 300 obviously false claims based on nasal swab test samples collected from the beneficiary on a date after the beneficiary had died. Other claims were found to be medically unnecessary because:

• The ordered respiratory pathogen panel (RPP) tests were for uncommon respiratory pathogens,
• The beneficiaries had no symptoms of a respiratory illness,
• Physicians never ordered the COVID-19/RPP tests, and
• Some of the RPP tests were never performed.

The U.S. District Court of Maryland, where the complaint was pending, entered default judgments for the United States after Mr. Britton-Harr and his laboratory companies failed to defend against the allegations in court.

Beware of Audits, Investigations, and Potential FCA Liability

Grantees, subrecipients, and their contractors should monitor recent DOJ enforcement actions to be well-versed in the government’s 2024 focus areas and enforcement priorities. The DOJ’s COVID-19 Fraud Task Force continues to identify, investigate, and prosecute individuals and companies that commit COVID-related fraud centered on Coronavirus, Aid, Relief, and Economic Security (CARES) Act funding.  CARES Act cases include those involving the misuse of Paycheck Protection Program (PPP) funds and Economic Injury Disaster Loan (EIDL) payments.

As previously reported, health care providers that submitted reimbursement claims to the Health Resources and Service Administration’s COVID-19 Uninsured Program (UIP) have faced audits and investigations by HRSA and the HHS Office of Inspector General to determine whether the UIP payments for COVID-19 testing and vaccines were improper.  Those providers may also face FCA liability, as a recent $12 million settlement involving an urgent care practice that submitted false claims for UIP payments for COVID-10 testing of uninsured individuals demonstrates.

Federal agencies are also conducting their own COVID-19 enforcement actions. For example, in line with its COVID-19 Response Strategic Plan, HHS-OIG reports numerous enforcement actions related to COVID-19 testing, vaccines, and relief funding.

Finally, recipients of federal funds should recognize that the serious risks associated with the submission of false claims (including the knowing retention of overpayments) may be partially addressed and mitigated through self-disclosure and cooperation.

If you have any questions regarding False Claims Act investigations or litigation, please contact Feldesman Partner and Enforcement Insider Editor Mindy B. Pava (mpava@feldesman.com) or call 202.466.8960. Be sure to also check out our Enforcement Insider blog to stay up to date on the latest enforcement actions and court decisions of interest to federal grantees and other recipients of federal funding.