Perspective

Company executives, medical professionals charged in large health care fraud scheme

The U.S. Department of Justice announced investigations by the FBI and the HHS Office of the Inspector General led to charges against 24 defendants for alleged participation in health care fraud schemes involving more than $1.2 billion in losses and the execution of more than 80 search warrants in 17 federal districts.

“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,” Assistant Attorney General of the Justice Department’s Criminal Division Brian A. Benczkowski, said in a press release. “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.”

Health care fraud schemes

According to the release, the charges announced target an alleged scheme involving the payment of illegal kickbacks and bribes by durable medical equipment (DME) companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that were medically unnecessary. The CEOs, chief operating officers and others associated with five telemedicine companies, the owners of dozens of DME companies and three licensed medical professionals involved are accused of causing more than $1 billion in loss, the release noted.

In addition, the release noted the execution of search warrants to support related investigative efforts in seven additional U.S. Attorney’s Offices was also taken. These include various investigations conducted by the District of New Jersey, District of South Carolina, Southern District of California, District of Nebraska, Middle District of Florida, Eastern District of Missouri and Western District of Washington.

“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,” Robert Johnson, assistant director of the FBI’s Criminal Investigative Division, said in the release. “Health care fraud causes billions of dollars in losses; it deprives real patients of the critical health care services they need and it can endanger the lives of real patients so individuals like those arrested today can profit from their criminal activity. Through today’s coordinated national effort, we put an end to this egregious and costly health care fraud scheme, and the public can rest assured the FBI will continue to make health care fraud investigations a top priority.”

CMS takes action

The CMS Center for Program Integrity also announced that it took adverse administrative action against 130 DME companies that had submitted more than $1.7 billion in claims and were paid more than $900 million.

“The Centers for Medicare and Medicaid Services Center for Program Integrity is proud to work very closely everyday with our law enforcement partners to stop exploitations of vulnerable patients and misuse of taxpayer dollars,” Alec Alexander, deputy administrator and director of the Center for Program Integrity, said in the release. “In this case, CMS has taken swift administrative action and has suspended payments to 130 distinct providers thereby likely preventing billions of additional dollars in losses. CMS remains committed to protecting the millions of beneficiaries we are honored to serve and to preventing fraud of all sorts in the Medicare and Medicaid programs.”

 

References:

www.justice.gov/opa/pr/federal-indictments-and-law-enforcement-actions-one-largest-health-care-fraud-schemes

 

www.justice.gov/usao-nj/pr/seven-people-charged-new-jersey-massive-health-care-fraud-scheme-involving-telemedicine

The U.S. Department of Justice announced investigations by the FBI and the HHS Office of the Inspector General led to charges against 24 defendants for alleged participation in health care fraud schemes involving more than $1.2 billion in losses and the execution of more than 80 search warrants in 17 federal districts.

“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,” Assistant Attorney General of the Justice Department’s Criminal Division Brian A. Benczkowski, said in a press release. “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.”

Health care fraud schemes

According to the release, the charges announced target an alleged scheme involving the payment of illegal kickbacks and bribes by durable medical equipment (DME) companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that were medically unnecessary. The CEOs, chief operating officers and others associated with five telemedicine companies, the owners of dozens of DME companies and three licensed medical professionals involved are accused of causing more than $1 billion in loss, the release noted.

In addition, the release noted the execution of search warrants to support related investigative efforts in seven additional U.S. Attorney’s Offices was also taken. These include various investigations conducted by the District of New Jersey, District of South Carolina, Southern District of California, District of Nebraska, Middle District of Florida, Eastern District of Missouri and Western District of Washington.

“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,” Robert Johnson, assistant director of the FBI’s Criminal Investigative Division, said in the release. “Health care fraud causes billions of dollars in losses; it deprives real patients of the critical health care services they need and it can endanger the lives of real patients so individuals like those arrested today can profit from their criminal activity. Through today’s coordinated national effort, we put an end to this egregious and costly health care fraud scheme, and the public can rest assured the FBI will continue to make health care fraud investigations a top priority.”

CMS takes action

The CMS Center for Program Integrity also announced that it took adverse administrative action against 130 DME companies that had submitted more than $1.7 billion in claims and were paid more than $900 million.

“The Centers for Medicare and Medicaid Services Center for Program Integrity is proud to work very closely everyday with our law enforcement partners to stop exploitations of vulnerable patients and misuse of taxpayer dollars,” Alec Alexander, deputy administrator and director of the Center for Program Integrity, said in the release. “In this case, CMS has taken swift administrative action and has suspended payments to 130 distinct providers thereby likely preventing billions of additional dollars in losses. CMS remains committed to protecting the millions of beneficiaries we are honored to serve and to preventing fraud of all sorts in the Medicare and Medicaid programs.”

 

References:

www.justice.gov/opa/pr/federal-indictments-and-law-enforcement-actions-one-largest-health-care-fraud-schemes

 

www.justice.gov/usao-nj/pr/seven-people-charged-new-jersey-massive-health-care-fraud-scheme-involving-telemedicine

    Perspective
    B. Sonny Bal

    B. Sonny Bal

    Medical professionals got caught up in this massive health care fraud scheme by prescribing DME in exchange for payments. Health providers should know that the government has powerful legal and technical tools to identify crimes (sometimes helped by whistleblowers), set up sting operations, collect incriminating data over time and obtain convictions. Unlike medical malpractice, criminal indictments are such that the odds of success are heavily in favor of the accuser, ie., the government. Federal sentencing guidelines can impose unavoidable penalties, such as jail time, monetary fines, property seizures and the permanent end of professional careers. If an offer to participate in a business scheme involving health care goods or services comes along, prudent health care providers should have a reputable, established law firm review and advise of the legality of the proposed scheme as a threshold step. Ignorance of the law, or the fact that everyone else seems to be doing it, will not excuse criminal conduct.

    • B. Sonny Bal, MD, PhD, JD, MBA
    • CEO, SiINTX Technologies
      Salt Lake City

    Disclosures: Bal reports no relevant financial disclosures.