As lab owners buy luxury cars, Biden steps up scrutiny of $5 trillion in COVID-19 aid

When patients came to the South Florida testing lab owned by Christopher Licata, they got the COVID-19 tests they had requested — along with more lucrative but medically unnecessary genetic and respiratory tests, allowing Licata to bill Medicare $6.9 million, federal prosecutors say.

Licata got caught – the Delray Beach man pleaded guilty to one count of conspiracy to defraud Medicare and is expected to be sentenced on March 24 – but federal officials are working to tighten oversight more of $5 trillion in pandemic relief funding passed by Congress over the past two years.

President Joe Biden underscored the enormous challenge this week in his State of the Union address when he announced plans for a special prosecutor to ‘prosecute the criminals who stole billions in relief money. “.

While the White House cited identity theft by criminal syndicates and widespread pandemic relief fraud as examples programs for small businesses and the unemployedexperts say programs that have shelled out billions for COVID-19 testing and medical care have also been subject to fraud and unnecessary spending.

The federal government has provided more than $10 billion to schools, community health centers, labs, doctors, telemedicine companies and contractors to provide COVID-19 testing and related services. Only a handful of lab owners and test providers have been accused of wrongdoing and charged with crimes.

But there are signs of emerging problems.

The federal government has paid more than $500 million to three laboratories with links to a handful of nationwide testing operations currently under investigation. In January, the FBI raided the headquarters of a test distributor, the Center for COVID Control in the Chicago area, run by an entrepreneur whose social media posts cited “COVID money” with images of new Lamborghinis, a Ferrari and a $1.36 million mansion.

A Center for COVID Control testing site can be seen in Chicago, Illinois on January 29, 2021.

Government surveillance investigators have warned that coronavirus tests can lead to fraud when labs or doctors use them to order more expensive but unnecessary tests to enrich themselves. The U.S. Department of Health and Human Services’ inspector general will analyze health insurance claims submitted by labs for respiratory, allergy and genetic testing to find patterns of fraud and abuse. the report is planned for this year.

Licata, 45, owner of Boca Toxicology, bribed at least two people who recruited Medicare patients and obtained doctors’ orders for COVID tests and “higher-reimbursement” respiratory and genetic tests, according to his settlement agreement. advocacy. Licata bribed telemedicine companies to obtain doctors’ orders for unnecessary respiratory and genetic testing, court documents show.

In November, a An Arkansas man has been charged on health care fraud charges related to $100 million in bogus bills for urine, COVID-19, breath and other tests. Federal prosecutors said Billy Joe Taylor, who controlled multiple labs, obtained information about Medicare enrollees and repeatedly submitted requests for testing. Federal prosecutors said he used the money to live a “lavish” life. Among the items seized by federal prosecutors: a Rolls Royce, a Tesla and a Porsche, real estate, jewelry, dozens of guitars and other instruments, clothing and other items.

The federal government has already appointed an oversight group of 21 inspectors general called the Pandemic Response Accountability Committee. The monitoring group created a website to track public spending and provide data to analyze trends to detect fraud, waste and abuse.

But experts say such large sums meant to be spent quickly will inevitably attract people seeking to exploit the public health crisis.

“You’re going to lose money along the way,” said Bruce Dorris, president and CEO of the Association of Certified Fraud Examiners. “Fraudsters are taking advantage of this huge sum of money being flooded into a market so quickly, with very little collateral.”

“Monitoring has really suffered”

When the Trump administration imposed the first pandemic relief programs in 2020, a basic compromise was made. Faced with rising infections, deaths and shutdowns to slow the spread of the coronavirus, Congress passed a series of relief packages to get aid to Americans as quickly as possible.

“They made it clear that speed was the priority, and because of that, oversight really suffered,” said Sean Moulton, senior policy analyst at the Project on Government Oversight.

The Justice Department has prosecuted dozens of fraud and theft cases under the Paycheck Protection Program, which provides loans to businesses that can be forgiven if companies use funds correctly and document jobs saved. . Unemployment insurance benefits have also been the subject of fraudulent claims. Biden’s new special prosecutor will lead teams of prosecutors and agents to pursue cases involving such fraud, White House officials say.

Government investigators may attempt to recover money in the event of criminal fraud or if the money is spent outside the parameters of a program. But in many cases, it is difficult to recover the money that could be wasted.

“The money came out with very little checks and balances up front,” Moulton said. “And then there was this effort to do surveillance investigations afterwards, which is far from the most effective way to go about trying to get that money back.”

An uninsured program draws attention

Although Medicare and Medicaid have established ties with doctors and labs, the Health Resources Service Administration’s uninsured COVID-19 program is new and in place to quickly reimburse for tests, vaccine administration and other COVID-related care. Congress has authorized more than $4 billion for the program.

Since the start of the pandemic, federal prosecutors have filed half a dozen criminal cases against people accused of wrongfully spending Medicare funds on coronavirus testing programs, according to the pandemic watch website. of the federal government. No one has been charged with embezzling funds from the uninsured program.

Nearly 50,000 labs, doctors and other providers have been reimbursed by the uninsured program, according to a federal payments database.

People wait to get tested for COVID-19 at a pop-up testing site in Los Angeles, Monday, Dec. 20, 2021. Omicron has outstripped other variants and is now the dominant version of the coronavirus in the United States, representing 73% of new infections last week, federal health officials said Monday.  (AP Photo/Jae C. Hong)

People wait to get tested for COVID-19 at a pop-up testing site in Los Angeles, Monday, Dec. 20, 2021. Omicron has outstripped other variants and is now the dominant version of the coronavirus in the United States, representing 73% of new infections last week, federal health officials said Monday. (AP Photo/Jae C. Hong)

The agency takes “corrective action” against providers who fail to meet the terms and conditions of the uninsured program. These actions may include suspension of reimbursement, post-payment reviews and program termination, HRSA spokesman Scott Kodish said.

The agency also checks doctors and labs to make sure they haven’t been terminated from participating in Medicare, Medicaid or other health programs. The HHS Inspector General publishes a monthly list of providers excluded from these federal health programs.

HRSA officials declined to identify examples of providers who were pushed out of the uninsured program. “HRSA has taken corrective action toward uninsured program participants, including suspending funds,” Kodish said. “However, as mentioned, we cannot comment on specific instances or provide details of these actions.”

The HHS Inspector General is conducting an audit of the uninsured program to verify whether requests for COVID-19 testing or treatment meet federal requirements. The review is expected to be completed this year, a spokeswoman said.

two states sued the national coronavirus testing chain Center for COVID Control and its lead lab, Doctors Clinical Lab, alleging the sites and lab provided inaccurate results, fraudulently reported negative results, and listed people with private insurance as uninsured.

Even after Minnesota and Washington sued the test chain and the lab, Doctors Clinical Lab continued to collect from the uninsured program. From Jan. 31 to Feb. 22, Doctors Clinical Lab sites in Chicago and Rolling Meadows, Illinois received $11.4 million for COVID testing.

Fraud experts say that if some cases are prosecuted criminally, many labs might not be breaking the law, but still spending public money in a way that brings little benefit.

“Maybe they didn’t break the law, but they probably didn’t need the money, or they took the money to provide some services that they weren’t really able to do” , Moulton said. “It’s really hard to say that it was a real fraud. But a little checking beforehand might have revealed that this is not the company we should be doing the COVID testing with. They have no experience in this area. »

Grace Hauck contributed.

Ken Alltucker is on Twitter as @kalltucker or can be emailed at [email protected]

This article originally appeared on USA TODAY: COVID-19 relief funds face new federal review to root out fraud


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