DOJ targets nationwide health care fraud scheme involving over $2.5 billion

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The Justice Department announced a sweeping enforcement effort Wednesday aimed at health care, telemedicine and illegal prescription schemes totaling of $2.5 billion in alleged fraud.

The two-week national law enforcement effort resulted in both federal and state level charges against 78 defendants – 24 of whom are doctors, nurses, or other licensed medical professionals. Cases were brought 16 states including California, Florida, Georgia and New York. As part of the enforcement action officials issued 90 Medicare and Medicaid revocations and billing suspensions, and seized or restrained millions of dollars in cash, automobiles and real estate.

“These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it,” Attorney General Merrick Garland said in a statement Wednesday. “The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs.”

Several of the schemes, according to the Justice Department, were aimed at vulnerable populations like the elderly, people with mental health issues, pregnant people, individuals with opioid addictions and patients at risk of contracting HIV.

In one case, prosecutors allege that the leaders of a software company conspired to create a platform that allowed doctors and telemarketers to coordinate selling medical equipment in exchange for kickbacks.

According to the indictment, the defendants created a massive telemarketing operation that targeted disabled and elderly patients with letters, calls and advertisements to sign up for unnecessary medical equipment or prescriptions. The software, according to the indictment, then generated fake Medicare order formers for doctors to sign so that it would appear as thought the equipment orders were real and necessary.

The conspiracy, prosecutors say, resulted in $1.9 billion in fraudulent reimbursement claims submitted to Medicare and other government insurers.

A second case in Washington state includes allegations that a licensed physician signed more than 2,800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated.

Prosecutors also went after individuals who allegedly bought back HIV medications from patients and then repacked those medications to be sold to pharmacies – sometimes containing the wrong medications or proper labels, broken pills or pebbles. In another case, a Wisconsin woman allegedly hosted community baby showers to coerce pregnant people into signing up for prenatal services through her company and then used those patients to submit millions of dollars in fraudulent claims.

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