$430 million false billing medicare fraud, 91 people charged


$430 million false billing medicare fraud, 91 people charged


Ninety-one people from seven US cites have been charged with $430 million's worth of Medicare fraud, the Human Services (HHS) Secretary Kathleen Sebelius and Attorney General Eric Holder and Health announced today.

People being charged include nurses, doctors and other certified health care professionals. They are accused of false billing and being involved in fraudulent schemes.

Attorney General Holder said:

"Today's enforcement actions reveal an alarming and unacceptable trend of individuals attempting to exploit federal health care programs to steal billions in taxpayer dollars for personal gain. Such activities not only siphon precious taxpayer resources, drive up health care costs, and jeopardize the strength of the Medicare program - they also disproportionately victimize the most vulnerable members of society, including elderly, disabled and impoverished Americans."

HHS Secretary Sebelius said:

"Today's arrests put criminals on notice that we are cracking down hard on people who want to steal from Medicare. The health care law gives us new tools to better fight fraud and make Medicare stronger. In addition to the arrests made today, HHS used new authority from the health care law to stop future payments to many of the health care providers suspected of fraud, saving Medicare resources and taxpayer dollars from being lost to fraud in the first place."

As indictments were unsealed across the country, dozens of people either turned themselves in or surrendered. Indictments (charges) included over $230 million in home health care fraud, about $100 million in mental health care fraud, and over $49 million in ambulance fraud - there were also other charges involving millions of dollars in other frauds.

Thirty health care providers were either suspended or faced with administrative action after inspectors had analyzed credible evidence of fraud. The Affordable Care Act authorizes the HHS to stop payments until an investigation has been resolved.

The HHS Medicare Fraud Strike Force and the Department of Justice created a multi-agency team of local, state and federal investigators and prosecutors whose aim was to fight Medicare fraud by using Medicare data analysis techniques. This particular takedown involved 500 law enforcement agents from HHSOIG, the FBI, several Medicaid Fraud Control Units, and other local and state enforcement agencies, the HHS informed.

The 91 people are accused of and charged with various crimes, including:

  • Conspiracy to commit health care fraud
  • Violations of the anti-kickback statutes
  • Money laundering
The investigation revealed a series of different fraud schemes involving a range of medical services and treatments, such as:
  • Ambulance services
  • DME (durable medical equipment)
  • Home health care
  • Mental health services
  • Occupational therapy
  • Physical therapy
  • Psychotherapy
Court documents describe schemes in which claims were submitted to Medicare either for unnecessary or fictitious treatments. The defendants are accused of paying cash kickbacks to people they recruited, these people supplied them with beneficiary data which was used fraudulently to get money for Medicare services.

In total, these people's alleged criminal activities amounted to about $429.2 million in fraudulent billing.

Assistant Attorney General, Lanny A. Breuer, said: "Today's coordinated actions represent one of the largest Medicare fraud takedowns in Department of Justice history, as measured by the amount of alleged fraudulent billings. We have made it one of the Department's missions to hold accountable those who abuse the Medicare program for personal profit. And there are Medicare fraudsters in prisons across the country - some who will be there for decades - who can attest to our determination, and our effectiveness."

FBI Associate Deputy Director, Kevin Perkins, said: "Health care fraud leads to higher health care costs and makes quality care more difficult to obtain. Working together to stop fraud, as we did today, will ensure that Americans' hard-earned dollars are used to care for the sick - not to line the pockets of criminals."

HHS Inspector General, Daniel R. Levinson said: "When home health agencies, durable medical equipment companies, pharmacies, or other health care providers are suspected of breaking the law, they can expect to be caught and held accountable."

CMS Deputy Administrator for Program Integrity, Dr. Peter Budetti said: "This is the result of coordinated anti-fraud efforts - including Medicare flagging suspicious activity, efforts between agencies to investigate this criminal activity, and today's actions by law enforcement and HHS. As we stop payments to these providers suspected of fraud, we continue our efforts to move from a pay-and-chase model to one where we stop fraudsters before they can successfully bill Medicare and Medicaid."

Many accused of fraud in Miami

Thirty-three defendants were charged with being involved in a wide range of fraud schemes in Miami, amounting to $204.5 million in fraudulent billing for DME, physical therapy, occupational therapy, mental health services and home health care.

Three people are alleged to have been involved in $74 million's worth of false billing. They work at LTC Professional Consultants and Professional Home Care Solutions Inc.

$67 million's worth of fraudulent billing from Hollywood Pavillion for mental health services is alleged to have been organized by five defendants.

Medicare Fraud in Los Angeles

One licensed physical therapist and three physicians are accused of being involved in several fraud schemes totaling $53.8 million in false billings.

Four people are being charged with having taken part in a fraud scheme at Alpha Ambulance Inc., involving $49 million's worth of billings for ambulance transportation that never occurred or was not necessary. This is the largest ambulance fraud scheme smashed by the Medicare Fraud Strike Force to have come to court.

Medicare Fraud in Dallas

Two doctors, two registered nurses and twelve others have been charged with allegedly participating in fraud schemes totaling $103.3 million in fraudulent billings. HHS quotes one case in which a doctor and three nurses are accused of being involved in illegal schemes at Raphem Medical Practice and PTM Healthcare Services to a tune of $100 million.

Dr. Joseph Megwa is charged with signing about 33,000 prescriptions for over 2,000 unique Medicare beneficiaries from 2006 to 2011, according to court documents. A number of beneficiaries had primary care physicians who had never provided them with any medical or healthcare services. Megwa apparently signed stacks of documents at a time without checking them.

Medicare Fraud in Houston

Seven people are charged with taking part in a scheme at a hospital which fraudulently obtained $158 million for community health center services. They worked as administrators at the hospital and paid kickbacks to Medicare beneficiaries in the form of coupons which could be used in the hospitals' "country stores", food and cigarettes. The beneficiaries attended the hospital's partial hospitalization programs (PHP).

Mohammad Kahn, who was assistant administrator at the hospital, had previously pleaded guilty on February 22nd, 2012 to conspiracy to commit health care fraud and paying bribes amounting to $116 million's worth of false claims. Kahn pleaded guilty. A further $42 million fraudulent claims were discovered by this latest investigation.

Medicare Fraud in Brooklyn

Four chiropractors, one doctor and twelve others have been charged with $23.2 million's worth in false billings.

In just one case, where fraud totaled $13.8 million, a medical doctor and nine others have been charged with a fraud scheme at Cropsey Medical Care PLLC for physical therapy and related services. Beneficiaries were provided with unnecessary physical therapy and paid kickbacks; in some cases no therapy was provided.

Medicare Fraud in Baton Rouge and Chicago

A licensed practical nurse plus three defendants were charged in Baton rouge for fraud schemes amounting to $2.4 million for medically unnecessary durable medical equipment.

According to court documents, a dermatologist and a psychologist have been involved in millions of dollars in false claims for unnecessary psychotherapy services and laser treatments.

In Chicago, two defendants, including a dermatologist and a psychologist, are charged for their roles in fraud schemes involving, according to court documents, millions of dollars in false claims for medically unnecessary laser treatments and psychotherapy services.

Since The Medicare Fraud Strike Force was created, in March 2007, over 1,480 people have been caught and charged for falsely billing Medicare for over $4.8 billion. HHS emphasized that "The charges and allegations contained in the indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty."


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