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Nationwide Medicare Fraud Takedown Charges 243

On June 18, the Justice Department, the Department of Health and Human Services (“HHS”) and the FBI together announced a nationwide sweep led by the Medicare Fraud Strike Force that produced indictments of 243 individuals – including 46 doctors, nurses and other licensed medical professionals – on charges they participated in Medicare fraud schemes that in the aggregate represented $712 million in false Medicare billings.


“This action represents the largest criminal health-care fraud takedown in the history of the Department of Justice,” said U.S. Attorney General Loretta Lynch. Lynch said that the individuals who were charged “billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.”


Indictments were handed down in 17 districts, including Medicare fraud hotbeds such as Miami and New York City. The 243 individuals indicted were charged with a variety of crimes, including conspiracy to commit healthcare fraud, violation of the anti-kickback statute, money laundering and aggravated identity theft in areas from home healthcare, psychotherapy, and physical and occupational therapy to durable medical equipment and prescription fraud.


The indictments alleged that in many cases, patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.


More than 40 of those charged were involved in schemes that targeted Medicare’s Part D drug benefit, which was implemented in 2006 and has not been the subject of vigorous enforcement. “For us, the greatest concern looking forward is the prescription drug program,” said Gary Cantrell, a top investigator for the HHS inspector general’s office.   Part D fraud schemes often involve billing for drugs that are never dispensed or billing for narcotics and painkillers that are diverted to street sales.


Federal officials say the recent arrests were aided by increasingly sophisticated computer programs that scan billing data for potential fraud.  HHS Secretary Sylvia Burwell said that the federal government’s enforcement abilities have also been bolstered by the Affordable Care Act, which provided an additional $350 million for health care fraud prevention and enforcement efforts and helped the Justice Department hire more prosecutors and allowed the strike force to expand from two cities to nine.


Just a few examples illustrate the broad scope of frauds that the government’s investigation uncovered:


  • Four people operating companies in Louisiana and California sent talking glucose monitors to Medicare recipients whether they needed them or not and fraudently billed Medicare for over $22 million.


  • Kickbacks allegedly paid to patient recruiters and assisted living facility owners throughout the Southern District of Florida resulted in administrators in a mental health center in Miami billing Medicare almost $64 million between 2006 and 2012 for intensive mental health treatment to beneficiaries.


  • 16 defendants in Detroit, including three owners of a hospice service who allegedly paid kickbacks for referrals, were charged with participating in fraud, kickback and money laundering schemes involving approximately $122 million in false claims to Medicare for services that were medically unnecessary or never rendered, including home health care, physician visits, and psychotherapy.


  • In Brooklyn, nine people were charged in two separate criminal schemes involving physical and occupational therapy, including a $50 million physical therapy Medicare fraud scheme that was part of an earlier case and a separate $8 million physical and occupational therapy fraud scheme.


Under Federal law, individuals who report fraud to the government are sometimes entitled to monetary awards. If you are aware of wrongdoing and would like to know more about your rights, please click here.

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