Fraud

243 Charged in Medicare Fraud Schemes

Feds Say Billing Scams Totaled $712 Million
243 Charged in Medicare Fraud Schemes

Federal authorities announced their largest national Medicare fraud takedown to date, involving criminal charges against 243 individuals allegedly responsible for false billing totaling approximately $712 million.

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In a June 18 joint announcement, officials at the Department of Health and Human Services, Department of Justice and FBI said a "nationwide sweep" led by the Medicare Fraud Strike Force in 17 districts has resulted in charging 243 individuals, including 46 physicians, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes. As of June 18, 184 defendants had been taken into custody, a DOJ spokesman says.

Officials called "the coordinated takedown" the largest in strike force history, both in terms of the number of defendants charged and the loss amount.

The sweep also resulted the Centers for Medicare and Medicaid Services using its authority under the Affordable Care Act to suspend a number of healthcare providers from participating in the Medicare program.

Variety of Charges

The defendants in the takedown are charged with various healthcare fraud-related crimes, including conspiracy to commit healthcare fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home healthcare, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.

More than 44 of the defendants are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which regulators say is the fastest-growing component of the Medicare program.

"This takedown adds to the hundreds of millions we have saved through fraud prevention since the Affordable Care Act was passed," said HHS Secretary Sylvia Mathews Burwell. "With increased resources that have allowed the Strike Force to expand and new tools, like enhanced screening and enrollment requirements, tough new rules and sentences for criminals, and advanced predictive modeling technology, we have managed to better find and fight fraud as well as stop it before it starts."

The Medicare Fraud Strike Force, a multi-agency team of federal, state and local investigators and prosecutors designed to combat Medicare fraud through the use of Medicare data analysis techniques, coordinated the investigation. Since the program's inception in March 2007, Strike Force operations in nine locations have charged more than 2,300 defendants who collectively are alleged to have falsely billed the Medicare program for more than $7 billion, according to federal authorities.

Among the large Medicare busts was the May 2014 arrest of 90 individuals in six states who were allegedly tied to Medicare fraud schemes responsible for $260 million worth of false billings (see 90 Charged in Medicare Fraud Schemes). Also, in October 2012, federal authorities announced a Medicare fraud crackdown that involved charges against 91 individuals in fraud schemes allegedly involving approximately $492 million in false billing (see 91 Charged With Medicare Fraud).

A Wake-Up Call

Security expert Mac McMillan, CEO of the consultancy CynergisTek, says the magnitude of the most recent Medicare takedown is significant. "This should be a wake-up call to those healthcare professionals who think it is OK to fudge around the edges, or in some cases just outright steal from the system, that their days are numbered and the feds are serious about curbing this very important problem," he says. "Hopefully it will have some impact, but frankly, right now, it seems like someone declared open season on healthcare between this [type of fraud] and the hacks we've seen lately."

Healthcare entities can help in the battle against fraud by monitoring for criminal behavior within their own organizations, he says. "One of the simplest ways is to perform periodic audits of what workforce members involved in preparing or handling claims are doing, as well as audits of patients receiving discharge summaries and bills."

Additionally, more commercial health insurers should follow CMS's lead and implement analytical tools that can help detect suspicious activities, he says. "They are the only really effective tools for proactive monitoring and detection," he says. "Those committing fraud may not cause a compliance trigger to be activated, but generally fraud requires an abnormal event to occur. Monitor for those, and you have a better chance of detecting inappropriate behavior."

Fraud Scams Busted

Among those charged in the latest Medicare fraud takedown were individuals in six states:

  • Seventy-three defendants in Miami were charged with offenses relating to their alleged participation in various fraud schemes involving approximately $263 million in false billings for home healthcare, mental health services and pharmacy fraud. In one case, administrators in a mental health center billed close to $64 million between 2006 and 2012 for purported intensive mental health treatment to beneficiaries and allegedly paid kickbacks to patient recruiters and assisted living facility owners. Medicare paid approximately half of the claimed amount.
  • Twenty-two individuals in Houston and McAllen, Texas, were charged in cases involving more than $38 million in alleged fraud. One of these defendants allegedly coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and treatments and then received payment for those who qualified. The company that paid the defendant for recruiting patients to bill for medically unnecessary services submitted close to $16 million in claims to Medicare, more than $4 million of which was paid.
  • Seven people in Dallas were charged in connection with home healthcare schemes. In one scheme, six owners and operators of a physician house call company allegedly submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service. The company also allegedly significantly exaggerated the length of physician visits, often billing for 90 minutes or more for an appointment that lasted only 15 or 20 minutes.
  • Eight individuals in Los Angeles were charged for their alleged roles in schemes to defraud Medicare of approximately $66 million. For example, a physician is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including more than 1,000 power wheelchairs and home health services that were not medically necessary and often not provided.
  • Sixteen defendants in Detroit were charged for their alleged roles in fraud, kickback and money laundering schemes involving approximately $122 million in false claims for services that were medically unnecessary or never rendered, including home healthcare, physician visits and psychotherapy, as well as pharmaceuticals that were billed but not dispensed. Among those charged are three owners of a hospice service who allegedly paid kickbacks for referrals made by two doctors who defrauded Medicare Part D by issuing medically unnecessary prescriptions.
  • Five individuals in Tampa were charged with participating in a variety of alleged scams, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars worth of clams for physician services and tests that never were provided. In one case, a licensed pain management physician sought reimbursement for nerve conduction studies and other services that he allegedly never performed. Medicare paid the defendant more than $1 million for these purported services.
  • Nine individuals in Brooklyn, N.Y., were charged in two separate criminal schemes allegedly involving physical and occupational therapy. Three of those defendants face charges for their roles in a previously charged $50 million physical therapy scheme.
  • Eleven people in New Orleans were charged in connection with $110 million worth of alleged home healthcare and psychotherapy schemes. In one case, four individuals who operated two companies - one in Louisiana and one in California - that mass-marketed talking glucose monitors across the country allegedly sent the devices to Medicare beneficiaries regardless of whether they were needed or requested. The companies billed Medicare approximately $38 million for the devices, and Medicare paid the companies more than $22 million.

About the Author

Marianne Kolbasuk McGee

Marianne Kolbasuk McGee

Executive Editor, HealthcareInfoSecurity

Marianne Kolbasuk McGee is executive editor of Information Security Media Group's HealthcareInfoSecurity.com media site. She has about 30 years of IT journalism experience, with a focus on healthcare information technology issues for more than 15 years. Before joining ISMG in 2012, she was a reporter at InformationWeek magazine and news site, and played a lead role in the launch of InformationWeek's healthcare IT media site.




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