by David W. Ogden, Ronald C. Machen, Stephen A. Jonas, Ericka Aiken, Cadene Russell Brooks, and Athena Katsampes

On September 30, 2020, the United States Department of Justice (“DOJ”) announced the creation of the National Rapid Response Strike Force (“NRR Strike Force”) within the DOJ’s Health Care Fraud Unit.  The announcement was made in connection with the DOJ’s press release on the largest health care fraud and opioid enforcement action in DOJ history.  In the record-breaking enforcement action, the DOJ charged 345 defendants (including more than 100 doctors, nurses, and licensed medical professionals) across 51 federal districts with submitting more than $6 billion in false and fraudulent claims to federal health care programs and private insurers.  The charges generally target three types of fraud—telemedicine fraud; fraud involving substance abuse treatment facilities (also known as “sober homes”), including alleged kickbacks and bribes for patient referrals to sober homes; and illegal opioid distribution schemes.  The NRR Strike Force contributed to the Department’s efforts in bringing some of these charges.

For over a decade, the DOJ has used health care strike force operations to “focus on the worst offenders engaged in fraudulent activities.”[1]  Based in Washington, DC, the NRR Strike Force is the latest in a series of Strike Forces launched since March 2007 as part of the Health Care Fraud Strike Force Model.  This model focuses on a broad array of fraudulent activities, including health care fraud, wire fraud, mail fraud, and bank fraud.  The Strike Forces use a combination of traditional investigative techniques and advanced data analytics to identify and investigate fraudulent activity.  The model has expanded in recent years due to the success of the initial Strike Forces and now spans the country, including cities such as Miami, Los Angeles, Houston, Brooklyn, and Chicago.  As of September 30, the Health Care Fraud Strike Force program had reportedly charged more than 4,200 defendants, who collectively represent approximately $19 billion in fraudulent billing to Medicare.

The new NRR Strike Force team will oversee the investigation and criminal prosecution of individuals and corporations, including those seeking to criminally capitalize on the COVID-19 pandemic via health care fraud and related financial schemes (i.e., obtaining funds from the Paycheck Protection Program through fraudulent loan applications).  The NRR Strike Force will operate with agency partners including, but not limited to, DOJ Civil Division’s Fraud Section and Consumer Protection Branch, U.S. Attorney’s Offices across the country, state Medicaid Fraud Control units, the FBI, and HHS-OIG. 

The NRR Strike Force’s broad mandate distinguishes it from prior Strike Forces.  Unlike prior Strike Forces, which were focused more on fraud in particular locales (i.e., Miami, Los Angeles, Brooklyn, Chicago), the NRR Strike Force targets cases involving major health care providers that operate in multiple jurisdictions.  The DOJ noted that “prosecutions of those seeking to criminally exploit the COVID-19 pandemic through health care fraud and related financial fraud schemes” is an example of the types of matters that will fall under the NRR Strike Force’s purview.  Some regions and cities have a prevalence of particular types of fraud.  For example, the Detroit Strike Force has traditionally handled a variety of fraud in the home health care industry.  Without the jurisdictional constraints of prior Strike Forces, the NRR Strike Force will likely address a wider array of issues. 

Takeaways

1. The expansion of the Strike Force program, and its continued collaboration with several investigative agencies, likely foreshadows an increase in enforcement activity by the Fraud section.
2. Continuing disbursement of federal COVID-19 relief funds through the Coronavirus Aid, Relief, and Economic Security (CARES) Act or a re-opened Paycheck Protection Program (PPP) will likely be accompanied by an increase in COVID-19-related civil enforcement actions. Recent actions have targeted fraud such as the misuse of PPP loans and COVID-19-related online scams to sell products that became scarce during the pandemic.
3. The nationwide focus of the NRR Strike Force will likely alleviate the burden on local prosecutors’ offices to investigate fraud cases, including those involving COVID-19-related fraud.
4. The establishment of the NRR Strike Force signals DOJ’s continued commitment to enforcing the conditions of funds received from the government. Corporations and their in-house counsel should review the terms of any funds received from the government to ensure they are in compliance with program rules.  In the case of any ambiguity, corporations should consider seeking the advice of outside counsel with the appropriate expertise.

Footnotes

[1] U.S. Dep’t of Justice, Strike Force Operations, https://www.justice.gov/criminal-fraud/strike-force-operations.

David W. Ogden, Ronald C. Machen, and Stephen A. Jonas are partners, Ericka Aiken is counsel, and Cadene Russell Brooks and Athena Katsampes are associates, at WilmerHale.

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