The U.S. Department of Justice (DOJ) announced charges this month against a Michigan woman, Amina Abbas, for embezzling government property. This indictment is the first in the nation related to the CARES Act public health and social services emergency fund (the Provider Relief Fund), which provides funds to support healthcare providers during the COVID-19 pandemic.

The Provider Relief Fund was created through congressional appropriations now totaling $178 billion to reimburse healthcare providers’ eligible expenses and loss revenues attributable to COVID-19. HHS developed the Provider Relief Fund through multiple rounds of payment distributions, including both General Distributions and Targeted Distributions to specific provider categories. HHS also mandated program terms and conditions, published answers to frequently asked questions (FAQs), and made other program announcements to guide healthcare providers’ participation in the Provider Relief Fund.

According to the DOJ’s press release, the criminal indictment alleged that Ms. Abbas closed a home health agency, 1 on 1 Home Health, in early 2020 after receiving a $1.6 million-plus Medicare overpayment recoupment demand. Notwithstanding this demand and its closing, 1 on 1 Home Health received $37,656.95 from the Provider Relief Fund (likely through the initial automatic distribution paid to all providers participating in Medicare in 2019). Since 1 on 1 Home Health was closed and never operational during the pandemic, it could not use the money on healthcare expenses related to COVID-19, as required by the Provider Relief Fund. Instead, the DOJ alleged Ms. Abbas intentionally misused the funds to issue checks to her family members for personal gain.

While this is the first indictment related to the Provider Relief Fund, it is unlikely to be the last. The DOJ press release suggests a few potential lessons for healthcare providers that may become trends in future investigative efforts:

  1. Similar to most government investigations into healthcare fraud, DOJ worked with both the U.S. Department of Health and Human Services (HHS) Office of Inspector General and the Federal Bureau of Investigation. We understand federal prosecutors plan for numerous investigations into COVID-19-related program fraud (e.g., numerous Paycheck Protection Program loan fraud cases have been brought), clearly that will include investigations into the Provider Relief Fund.
  2. The Provider Relief Fund’s terms and conditions require recipients to have provided patient care after Jan. 31, 2020. That said, and noted above, HHS initially distributed funding automatically and expeditiously to all providers participating in Medicare in 2019 without confirming basic information including whether the recipient was even still open. Investigators may target such recipients as government data could highlight providers that did not bill Medicare in 2020 but retained Provider Relief Fund payments.
  3. DOJ’s framing may challenge certain healthcare providers’ past decisions with respect to the Provider Relief Fund. DOJ’s press release stated the program was to “aid medical providers in the treatment of patients suffering from COVID-19.” While certainly COVID-19 patients benefited from the program, HHS clearly utilized the program in a broader manner to quickly alleviate the pandemic’s burdens on healthcare providers, not only pay for patient care, or limit to providers treating patients with COVID-19 symptoms. DOJ’s framing, however, may suggest prosecutorial challenges when no apparent COVID-19-related patient benefit exists.
  4. Finally, healthcare providers must report and hire an external audit (in certain situations) to examine their healthcare-related expenses and lost revenues attributable to COVID-19, as discussed most recently in a Jan. 19, 2021, McGuireWoods alert. Healthcare providers should vigilantly fulfill these obligations to lessen future government scrutiny.