Investigating and prosecuting healthcare fraud remains one of the top priorities of the Department of Justice. Nationwide crackdowns and arrests have demonstrated that the government’s war on crime goes beyond drugs, guns, and gangs. While those are certainly a priority of DOJ and an easy way to boost prosecution numbers nationwide, they are by no means the only priority.

Recently we have seen national operations targeting physicians, labs, and marketers.  These investigations have swept up groups pushing genetic tests for cancer and other genetic markers; those telemarketing durable medical equipment (DME) such as knee, wrist, and shoulder braces for senior citizens;  U.S. Department of Veterans Affairs Medical Centers employees and vendors, alleging that they participated in a kickback scheme that inflated prices charged to the government for medical supplies and services; and 10 former NFL players for defrauding the NFL health plan by falsifying letters and prescriptions to pay for expensive devices that were never needed or ordered.

Here in the District of New Jersey there are pending prosecutions for fraudulent marketing of compound medicines; telemarketing of braces targeting senior citizens, who believed that the devices were free; and for telemarketing and telemedicine pushing genetic testing for cancer without regard for whether such tests are medically necessary. In general, these schemes target certain populations – whether it is by age; private health insurance that covers such compounds, devices or tests; or Medicare/Medicaid programs. If a person’s treating physician is not ordering the prescribed medicine, test, or device – or mass marketing is involved, targeting a specific group – there is a serious risk that numerous federal laws and regulations will be violated.

One such law is the federal healthcare Anti–Kickback Act, 42 U.S.C. § 1320a–7(b) (7). The statute specifically forbids any person or entity making or receiving payment in return for a medical referral for an item or service that is paid for under a federally-funded healthcare program. Thus, marketing groups who are paid on a percentage of the federal health care funds collected are in violation. Any payments or “gifts” that are in any way based upon the number of tests or devices ordered, or the amount of funds received are prohibited.

The Eliminating Kickbacks in Recovery Act of 2018 (EKRA), effective October 24, 2018, addresses kickbacks for patient referrals to labs and rehabilitation facilities where patients have private insurance. EKRA prohibits knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in return for the referral of a patient to, or in exchange for an individual using the services of, a recovery home, clinical treatment facility, or laboratory if the services are covered by a health care benefit program. This includes referrals of patients for genetic testing and other blood or DNA analysis.

Stahl Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact the firm, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at