412 charged in largest-ever fraud bust

July 13 was a very unlucky day for the 412 people charged in the largest fraud strike to date, totaling some $1.3 billion, according to the Department of Justice (DOJ). The orchestrated sting operation involved 41 federal districts, 30 state Medicaid fraud control units, the Department of Health and Human Services, the U.S. Attorney General’s office and others.

Authorities charged 115 medical professionals for healthcare fraud activities and charged more than 120 people with prescribing-related offenses, including opioids and narcotics. Nearly 300 providers were suspended.

The defendants allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and/or never provided, the DOJ noted. In many cases, those involved were allegedly 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.

Among the dozens of cases involved in the bust:

South Florida: 77 defendants are charged with false billing and misrepresented treatments totaling $141 million. In one case, the owner and operator of a purported addiction treatment center and home for recovering addicts and one other individual were charged in a scheme involving the submission of over $58 million in fraudulent medical insurance claims for purported drug treatment services. The allegations include actively recruiting addicted patients to move to South Florida so that the co-conspirators could bill insurance companies for fraudulent treatment and testing, in return for which, the co-conspirators offered kickbacks to patients in the form of gift cards, free airline travel, trips to casinos and strip clubs, and drugs.

Eastern Michigan: 32 defendants are charged with $218 million in fraudulent distribution of prescription drugs, billing for medically unnecessary treatments and false billing of treatments that never happened.

Southern Texas: 26 defendants are charged with dispensing and distributing controlled substances at a so-called pain management clinic, including issuing medically unnecessary prescriptions for hydrocodone in exchange for cash payments of up to $300 per script. Total charges: $66 million in alleged fraud.

Northern Illinois: Home health and therapy were the vehicles in this case involving 15 people and six different schemes of fraudulent billing. Overbilling, kickbacks, physical therapy fraud and others were named as charges totaling $12.7 million.

The number of medical professionals charged in the July takedown is particularly significant, the DOJ says, because virtually every healthcare fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. 

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions in the DOJ announcement. “Amazingly, some have made their practices into multimillion dollar criminal enterprises… We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

Pamela Tabar

Pamela Tabar was editor-in-chief of I Advance Senior Care from 2013-2018. She has worked as a writer and editor for healthcare business media since 1998, including as News Editor of Healthcare Informatics. She has a master’s degree in journalism from Kent State University and a master’s degree in English from the University of York, England.