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Wisconsin and US DOJ Working with WHA to Assist Hospitals on COVID-19 Scams and Price Gouging

May 21, 2020

Hospitals in other states have reported to state and federal attorneys various examples of COVID-19 related price gouging and PPE supply hoarding that have created challenges to hospitals’ abilities to respond to this pandemic. 
Both the Wisconsin Department of Justice and the Offices of the United States Attorney in the Eastern and Western Districts of Wisconsin have reached out to WHA to help disseminate information and assistance to hospitals that encounter such illegal activities that inhibit hospitals’ COVID-19 response.  Working with the Wisconsin and U.S. Department of Justice, WHA has created this Q&A to provide additional information to hospitals should they encounter potential COVID-19 related price gouging, PPE supply hoarding, or COVID-19 related scams (e.g., fraudulent claims of cures or other “medical” advice). 
Q:  If a hospital encounters suspected COVID-related price gouging, PPE hoarding or other COVID-19 related scams, where should hospitals report this information?
A:  The Wisconsin Department of Justice maintains a COVID-19 Resources website that includes hotlines and online resources should hospitals or others encounter price gouging or other COVID-19 scams. The U.S. Department of Justice maintains a Coronavirus Response website that includes information for reporting COVID-19 scams, price gouging and hoarding. 
Q:  Which agency should I contact – the U.S. Department of Justice or Wisconsin Department of Justice – with suspected price gouging, hoarding or scams?
A:  Both agencies are coordinating with each other, thus even though state and federal laws are not identical on these subjects, contacts to either agency is appropriate. 
Q:  What kinds of activities is the U.S. Department of Justice concerned with regarding hoarding?
A:  In a memo to U.S. Attorneys, U.S. Attorney General Barr said, “we will aggressively pursue bad actors who amass critical supplies either far beyond what they could use or for the purpose of profiteering. Scarce medical supplies need to be going to hospitals for immediate use in care, not to warehouses for later overcharging.”  The following items have been designated as scarce: N-95 respirators, powered air purifying respirators (PAPR), portable ventilators, sterilization services for medical devices, medical gowns or apparel (e.g., surgical gowns or isolation gowns), personal protective equipment (PPE) coveralls (e.g., Tyvek suits, PPE face masks or surgical masks), PPE face shields, and PPE gloves or surgical gloves.  Accumulating these materials for purposes of hoarding or price gouging may result in federal criminal prosecution.
Q:  What activities might be illegal price gouging?
A:  Wisconsin Department of Justice’s COVID-19 Resources page states that Wisconsin’s price gouging law prohibits any wholesaler or retailer during a declared period of abnormal economic disruption from selling consumer goods or services at prices that are more than 15% higher than pre-emergency prices, subject to certain exceptions. Additionally, the U.S. Department of Justice indicates that there are similar but different federal price gouging laws in addition to the Wisconsin prohibition. 
Q:  If a hospital has additional questions about COVID-19 related price gouging, hoarding or scams impacting health care providers, who should you contact? 
A:  WHA members can contact WHA General Counsel Matthew Stanford who can help provide additional information. Additionally, members may reach out directly to Assistant United States Attorney Kelly B. Watzka, Coronavirus Fraud Coordinator for the Eastern District of Wisconsin, and Assistant United States Attorney Chadwick Elgersma, Coronavirus Fraud Coordinator for the Western District of Wisconsin. Members may reach out directly to Assistant Attorney General Lewis Beilin at the Wisconsin Department of Justice.  

This story originally appeared in the May 21, 2020 edition of WHA Newsletter