U.S. Health-Fraud Stings Net 301 People; A Record

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U.S. law enforcement officials have charged 301 suspects with trying to defraud Medicare and other federal insurance programs in 2016, marking the “largest takedown” involving healthcare fraud allegations, the Justice Department said on Wednesday.

The national sweep resulted in charges against doctors, nurses, pharmacists and physical therapists accused of fraud that cost the government $900 million, the department said.

The cases involved an array of charges, including conspiracy to commit healthcare fraud, money laundering and violations of an anti-kickback law. This year’s sweep exceeded last year’s record in which 243 defendants faced charges in a combined $712 million in government losses.

Officials said it was the largest takedown in the nine-year history of the Medicare Fraud Strike Force, a joint initiative between federal, state and local law enforcement.

Attorney General Loretta Lynch said some of the cases reflect new, troublesome trends, including instances of identity theft in order to prepare fake prescriptions and a growing number of cases involving compounding, or the mixing of medications tailored to meet a patient’s needs. Compounded medications are typically very expensive. From 2012 to 2014, the quarterly Medicare spending on these prescriptions skyrocketed from $28 million to $171 million.

“As this takedown should make clear, healthcare fraud is not an abstract violation or benign offense,” Lynch said. “It is a serious crime.”

In one case, two owners of a group of outpatient clinics and a patient recruiter stand accused of submitting $36 million in fraudulent claims for physical therapy and other services that were not medically necessary.

The Justice Department said that to find patients, the clinic operators and the recruiter targeted poor drug addicts and offered them narcotics so they could bill them for services that were never provided. Another case was filed against the operator of a marketing business that received referral fees from pharmacies that filled and billed Tricare, the U.S. military’s government insurance program, for compounded medicines.

The prescriptions were submitted via “telemedicine” sites, and doctors were given blank prescription forms to fill out, regardless of medical necessity, according to the complaint. One doctor told the FBI her identity and medical credentials were used without her permission to fill thousands of dollars worth of prescriptions.

Steve’s Take: Seldom do I have an opportunity to applaud the efforts of our federal government workers. The ones who work in the trenches, so to speak.

I was one, decades ago, as a fledgling lawyer with the Internal Revenue Service. As a para—military organization, you were fine as long as you followed orders without question. But in a certain sense, we were looked at as the “enemy of the people,” our mission being to squeeze every last tax dollar out of every last citizen. And God forbid if someone didn’t report all of their income.

The Health Care Fraud and Abuse Control program has returned more than $29.4 billion to the Medicare Trust Funds since 1997. That’s $6.10 returned for each $1 invested in the last fiscal year.

Defendants collectively have billed Medicare more than $7 billion since the Medicare Strike Force began operations in 2007. During this time, the Strike Force has:

  • Charged more than 2,536 suspects involved in more than $8 billion in fraud since 1997.
  • The Strike Force’s largest-ever takedown, in 2016, resulted in charges against a record 301 suspects for $900 million in false Medicare and Medicaid billing.
  • The Strike Force has a 95% conviction rate and jail terms average four years. (Centers for Medicare & Medicaid Services, February 2016)

While Congress is dithering over an $800 million difference between what the Obama administration is seeking to fight the Zika emergency and what the GOP thinks is adequate, our Medicare Fraud and Abuse team is bringing hundreds of millions of dollars back to the federal coffers. I tip my hat to them.