Ninety-one people charged in $429M Medicare fraud schemes

A hospital president was among those charged for fraudulent billing

Topics: Medicare, Reimbursement, Finance, Health Policy, Market Trends, Strategy, Payer and Regulatory Policy, RAC and Other Post-Payment Audits, Revenue Cycle

October 5, 2012

The Medicare Fraud Strike Force—established by HHS and the Department of Justice (DOJ)—on Thursday announced that 91 individuals in seven cities have been charged for alleged fraudulent billing totaling an estimated $429 million.

The individuals—who included numerous physicians and nurses—were located in Baton Rouge, La., Brooklyn, N.Y., Chicago, Dallas, Houston, Los Angeles, and Miami. One individual charged in the sweep was the president and CEO of Riverside General Hospital, a safety-net hospital in Houston; federal officials allege that Riverside administrators paid cash to "patient recruiters," who would then steer mentally ill residents of the city's group homes to the hospital's clinics for unnecessary care.

According to U.S. Attorney General Eric Holder, the crackdown is another example of a growing trend of individuals attempting to steal billions in taxpayer dollars for personal gain. HHS Secretary Kathleen Sebelius notes that the department used its new authority under the Affordable Care Act to halt all future payments to providers who are suspected of fraud.

According to a DOJ release, the false billing charges included reimbursements for:

  • Home health care, which totaled $230 million;
  • Mental health services, which totaled $100 million; and
  • Ambulance transportation fraud, which totaled $49 million.

The individuals face allegations of:

  • Writing prescriptions for patients who did not qualify for them;
  • Paying for kickbacks, such as food and cigarettes, to patients who attended programs that hospitals could later bill Medicare for;
  • Identity theft; and
  • Money laundering (Carlson, Modern Healthcare, 10/4 [subscription required]; Ingram/Morgan, Reuters, 10/4; Yost, AP/Sacramento Bee, 10/4; Langford, Houston Chronicle, 10/4).

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