Medicare Fraud Unfolds
This past Tuesday, federal officials announced charges stemming from one of the largest health care fraud schemes in history. The alleged crimes, which resulted in more than $1.2 billion in medicare losses, spanned continents and ensnared hundreds of thousands of unsuspecting disabled and elderly patients with telemarketers from overseas offering low-cost or even free support equipment and braces for their backs, knees, wrists, and shoulders.
The basics of the scam were nothing new. According to allegations in court documents, some of the defendants allegedly controlled an international telemarketing network that involved call centers in the Philippines and throughout Latin America that they used to “up-sell” the Medicare beneficiaries in order to get them to accept multiple “free or low-cost” durable medical equipment (DME) braces, regardless of medical necessity.
Then, with little-to-no interaction with patients, sometimes only via a phone call and other times absolutely no contact at all, doctors received kickbacks for prescribing the medical braces, which in many cases were reportedly not even currently necessary for the patient.
The 24 individuals charged in this case were from across the U.S. and included three medical professionals, officials from five different telemedicine companies, and the owners of multiple DME companies. Additionally, in a separate move by the Centers for Medicare and Medicaid Services, payments were suspended to 130 DME sellers that submitted more than $1.7 billion in claims, having already received more than $900 million of those claims.
According to the Department of Justice, the enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with the U.S. Attorney’s Offices for the Districts of South Carolina, New Jersey and the Middle District of Florida and the Medicare Fraud Strike Force (MFSF) which is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG, in addition to IRS-CI and other federal law enforcement agencies that participated in the operation.
The investigation involved the execution of over 80 search warrants in 17 federal districts and the DOJ stated that the defendants allegedly laundered the proceeds from the scheme through international shell corporations and went on to purchase real estate in both the U.S. and abroad, luxury yachts, and exotic automobiles.
Assistant Attorney General Benczkowski was quoted as saying, “This Department of Justice will not tolerate medical professionals and executives who look to line their pockets by cheating our health care programs.”
Since March 2007, the Medicare Fraud Strike Force has charged nearly 4,000 defendants with more than $14B in fraudulent Medicare billing. Scammers and schemers are always on the lookout for an “easy” buck, and unfortunately there are all too many of them that have zero regard for who they hurt with their actions.
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