Fourteen doctors, nurses charged in Medicare fraud schemes

Scammers allegedly defrauded Medicare of $223M

HHS Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder on Tuesday announced that 89 health care and medical industry professionals—including 14 physicians and nurses—have been charged for allegedly defrauding Medicare of about $223 million through false billing.

The fraud sweep was the sixth in the government-led "takedowns" on health care fraud since 2010, officials said, which followed the creation of the Medicare Fraud Strike Force, a joint initiative between HHS and the Department of Justice (DOJ).

Since its inception, the Strike Force's operations—in nine locations—have charged more than 1,500 individuals for defrauding Medicare of more than $5 billion through false billing. And while federal officials once estimated that fraud costs Medicare between $60 billion and $90 billion per year, "this is the latest sign that we're beginning to turn the tide of Medicare fraud," according to Sebelius.

For the latest round of arrests, Strike Force agents identified suspects in Baton Rouge, Brooklyn, Chicago, Detroit, Houston, Los Angeles, Miami, and Tampa. The scams included:

  • Los Angeles: Three people fraudulently billed Medicare for about $9 million for durable medical equipment, HHS asserts. The scheme allegedly included illegal payments to patient recruiters, who then bribed Medicare beneficiaries to share their information; and physicians and medical clinics, who prescribed medically unnecessary power wheelchairs, which they sold to the defendants for illegal kickbacks.
  • Detroit: In one $12 million scheme, three people pretended to be doctors and signed prescriptions for drugs and other documents related to psychotherapy. 
  • Miami: In one $20 million case, three individuals bribed Medicare beneficiaries for their Medicare information, which was used to bill for fraudulent home health services. The lead defendant allegedly used his share of the funds to buy "multiple luxury vehicles," HHS reports, including two Lamborghinis, a Ferrari, and a Bentley.

During the news briefing, Holder noted that for each dollar that is spent on anti-fraud efforts, officials have recovered an average of $8 for the U.S. Treasury and the Medicare trust fund. He said, "This takes our comprehensive fight against health care fraud to a new level," adding, "This work has yielded extraordinary results."

However, Holder warned that the government's efforts to expand its anti-fraud initiatives are being affected by automatic across-the-board budget cuts under the sequester, which were enacted in March. For the fiscal year ending Sept. 30, DOJ's funding has been reduced by $1.6 billion, Holder said.

"Unless Congress adopts a balanced deficit reduction plan and stops the reductions currently slated for 2014, I fear our capacity to protect the American people from health care fraud ... will be further reduced," Holder said (Heavey/Morgan, Reuters, 5/14; Kennedy, AP/Washington Post, 5/14; Viebeck, "Healthwatch," The Hill, 5/14; HHS release, 5/14).

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