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DOJ Announces Criminal Indictments in International Health Care Fraud Scheme that Caused $1.2 Billion in Medicare Losses

Posted  April 12, 2019

The U.S. Department of Justice announced this week that it had issued criminal indictments against two dozen individuals in one of the largest health care fraud schemes in U.S. history. The indictments 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 doctors working with fraudulent telemedicine companies for back, shoulder, wrist, and knee braces that were medically unnecessary. The defendants – located in multiple states and foreign countries – allegedly preyed upon elderly patients, convincing them they needed a brace or device, which the defendants then billed to Medicare, and then laundered their ill-gotten gains through shell companies. The government estimates losses to the Medicare program at $1.2 billion. It is unclear how much, if any, of these funds will be recovered.

Several things are remarkable about the Government’s announcement: the broad scope of the alleged kickback scheme, the apparent complexity of the Government’s investigation (involving coordination between the DOJ, IRS, HHS OIG, CMS, and at least seven U.S. Attorney’s Offices), and the fact that, despite the mammoth losses that it caused to the Medicare program, the scheme went on for so long without being discovered.

As described by IRS-CI Chief Don Fort in the Government’s press release, the alleged conspiracy involved “broad corruption, massive amounts of greed, and systemic flaws in our healthcare system that were exploited by the defendants.” Whistleblowers are essential to bringing these systemic flaws to light and protecting our healthcare system. It is possible that a whistleblower is behind at least some of the information that led to the Government’s indictments in this particular matter and will be justly rewarded in a parallel civil False Claims Act action.

Who will be the whistleblower to bring to light the next healthcare fraud scheme in our, unfortunately, flawed system?  Hopefully, these courageous individuals will step forward to help stop the next scheme to defraud Medicare, Medicaid, or Tricare in its tracks.


Tagged in: Anti-Kickback and Stark, Criminal Proceedings, Healthcare Fraud, Medical Devices and DME,