This week DOJ announced the formation of a COVID-19 Fraud Enforcement Task Force “to marshal the resources of the Department of Justice in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.” In addition to components of DOJ, key agencies overseeing pandemic relief programs will participate, as well as the Special Inspector General for Pandemic Relief and the Pandemic Response Accountability Committee.
DOJ has repeatedly identified COVID-19 fraud as a major priority for the department, as discussed here and here. The announcement also mirrors a similar one made in 2009 to introduce the launch of a DOJ-led interagency Financial Fraud Enforcement Task Force to address fraud that occurred as part of the 2008 financial crisis. DOJ’s work in this space ultimately led to billions of dollars in penalties and settlements with major banks and other lenders.
The establishment of the task force coincides with another DOJ warning this week about COVID-19 fraud, directed to providers who have been charging patients for COVID-19 vaccines. All COVID-19 vaccination providers must sign an agreement with the U.S. Centers for Disease Control and Prevention. Among other contractual requirements, providers commit to forego billing any vaccine recipients for the cost of the vaccine or its administration. The agreement is structured broadly to impose False Claims Act liability for contractual noncompliance, by specifying that each requirement is a “material condition of payment”—mirroring the materiality requirement in the False Claims Act—and that noncompliance with any term could result in penalties, including under the False Claims Act. The DOJ press release reports that some providers have nonetheless been charging for COVID-19 vaccines and warns that they may incur criminal or civil penalties as a result. DOJ views these practices as particularly problematic because they may discourage members of the public from getting a vaccine. The press release provides a hotline number and encourages members of the public to report providers who are violating the billing prohibition.
In addition to liability under federal law, the specter of state enforcement action looms. DOJ issued this warning to vaccine providers in conjunction with not only its traditional federal law enforcement partner on healthcare fraud, the HHS Office of Inspector General, but also the California Department of Justice. The new HHS Secretary Xavier Becerra previously served as the head of the California Department of Justice and led that office’s increasingly active healthcare enforcement agenda. The California Department of Justice appears poised to continue that work, leveraging the broad tools at its disposal, including the state’s analogue of the federal False Claims Act, the California Insurance Frauds Prevention Act, and the California Unfair Practices Act.
We will continue to monitor these emerging enforcement trends and report updates here.