Healthcare Fraud

DOJ charges 24 healthcare executives and doctors in $1.2B fraud scheme

Posted on April 18, 2019 by Medtech[y] Staff


Twenty four telemedicine and medical equipment executives and physicians were recently charged by the U.S. Department of Justice (DOJ) for their alleged part in a $1.2 billion healthcare fraud scheme.

The DOJ didn't discriminate in those that were charged as the case includes the CEO's and other executives of telemedicine companies, physicians and owners of durable medical equipment companies. Those defendants don't only have the DOJ to be concerned with as The Center for Medicare Services (CMS) are getting in on the action as they are going after 130 durable medical equipment companies that were implicated as they billed CMS $1.7 billion in claims, with program paying out over $900 million.

The DOJ complaint states that the scheme consisted of illegal kickbacks and bribes by the medical equipment companies in exchange for referrals from the physicians who were working with the telemedicine companies for medically unnecessary wrist, knee, back and shoulder braces.

According to allegations in court documents, some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity.

“These defendants — who range from corporate executives to medical professionals — allegedly participated in an expansive and sophisticated fraud to exploit telemedicine technology meant for patients otherwise unable to access health care,” said Assistant Attorney General Benczkowski. “This Department of Justice will not tolerate medical professionals and executives who look to line their pockets by cheating our health care programs. I commend the Criminal Division prosecutors and our partners from U.S. Attorney’s Offices and law enforcement agencies across the country for their unrelenting efforts to stop this alleged fraud before more money was stolen from American taxpayers.”

The complaint also alleges that the international call center paid telemedicine companies to obtain DME orders for the Medicare beneficiaries and then the telemedicine companies paid physicians to write the unnecessary DME orders. Finally, the orders were fraudulently billed to Medicare after the international call center sold the DME orders they received from the telemedicine companies. In total this scheme of illegal kickbacks and bribes caused over $1 billion in losses to Medicare.

In order to hide the proceeds, international shell corporations were setup and used to purchase luxury real estate, yachts and exotic automobiles.

FBI Assistant Director Robert Johnson said, “Today, one of the largest health care fraud schemes in U.S. history came to an end thanks to close collaboration and coordination between the FBI and partners including HHS-OIG and IRS-CI.”

Join the discussion on our one of our many Healthcare Fraud Forums, including Medicare/Medicaid Fraud.

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