Fraud Management & Cybercrime

91 Charged with Medicare Fraud

Feds Allege a Variety of Billing Schemes
91 Charged with Medicare Fraud

In one of the U.S. government's largest Medicare fraud busts, federal authorities on Oct. 4 charged 91 individuals in connection with fraud schemes allegedly involving nearly $430 million in false billing.

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The Department of Health and Human Services and the Justice Department jointly announced the seven-city takedown, the result of a collaborative investigation.

Dozens of individuals were arrested or surrendered over a 24-hour period as indictments were unsealed across the country. In total, those indictments charge more than $230 million in home health care fraud, more than $100 million in mental health care fraud and more than $49 million in ambulance transportation fraud, plus millions more in other fraud schemes.

HHS said it also suspended or took other administrative action against 30 health care providers following a data-driven analysis that yielded credible allegations of fraud. Under the Affordable Care Act, HHS is able to suspend payments until the resolution of an investigation.

The defendants allegedly committed crimes that included conspiracy to commit healthcare fraud, healthcare fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and ambulance services.

The Scheme Details

The defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. 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 submit fraudulent billing to Medicare for services that were medically unnecessary or never provided, authorities say.

Collectively, the physicians, nurses, licensed medical professionals, healthcare company owners and others charged are accused of conspiring to submit a total of about $429.2 million in fraudulent billing.

"Today's arrests put criminals on notice that we are cracking down hard on people who want to steal from Medicare," HHS Secretary Kathleen Sebelius says.

Strike Force Effort

The joint DOJ and HHS 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. More than 500 federal and state law enforcement agents participated in the bust.

In a similar strike force action in May, 107 individuals in seven states were charged in a crackdown on $452 million worth of Medicare fraud.

In July, HHS announced the formation of a voluntary healthcare anti-fraud coalition that includes healthcare organizations and associations, health insurers, federal and state agencies. That anti-fraud effort is aiming to combat healthcare fraud through the sharing of information and best practices (see: Healthcare Anti-Fraud Coalition Formed.)

"These big takedowns are good from a public perspective in that it might deter some people from committing fraud and abuse, but there are still plenty more [fraudsters] out there," says Lee Arian, staff vice president of program integrity at Wellpoint, who's part of the public-private healthcare anti-fraud coalition launched this summer by HHS.

Technology is playing a role in helping to identify unusual activity that indicates fraud, he says. "From a [healthcare] industry perspective, we're at the early stages in using technology to identify fraud and abuse. But eventually I think we'll have the good success that the credit card industry has."


About the Author

Marianne Kolbasuk McGee

Marianne Kolbasuk McGee

Executive Editor, HealthcareInfoSecurity

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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