The U.S. Department of Justice (DOJ) has charged 24 people, inclusive of C-suite executives of five telemedicine companies, licensed medical professionals, and others, for their alleged participation in a massive $1.2 billion Medicare fraud scheme.
A news release from the DOJ noted that in one of the largest healthcare fraud schemes investigated by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), 24 defendants—including the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies and three licensed medical professionals—were charged. The DOJ also executed more than 80 search warrants in 17 federal districts.
What’s more, the Center for Medicare Services, Center for Program Integrity (CMS/CPI) announced that it took adverse administrative action against 130 DME companies that had submitted over $1.7 billion in claims and were paid over $900 million.
According to the DOJ, the charges specifically “target an alleged scheme involving the payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary.”
The DOJ further noted that some of the defendants allegedly controlled an international telemarketing network that lured over hundreds of thousands of elderly or disabled patients—in some cases, both—into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.
“The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. The proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad,” according to the DOJ.
Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in loss.
Assistant Attorney General Benczkowski said in a statement, “These defendants—who range from corporate executives to medical professionals—allegedly participated in an expansive and sophisticated fraud to exploit telemedicine technology meant for patients otherwise unable to access healthcare. This Department of Justice will not tolerate medical professionals and executives who look to line their pockets by cheating our healthcare programs. I commend the Criminal Division prosecutors and our partners from U.S. Attorney’s Offices and law enforcement agencies across the country for their unrelenting efforts to stop this alleged fraud before more money was stolen from American taxpayers.”
Added U.S. Attorney Craig Carpenito, “The defendants took advantage of unwitting patients who were simply trying to get relief from their health concerns. Instead, the defendants preyed upon their weakened state and pushed millions of dollars’ worth of unnecessary medical devices, which Medicare paid for, and then set up an elaborate system for laundering their ill-gotten proceeds.”
Last fall, four individuals and seven companies were indicted in a separate $1 billion telemedicine fraud scheme that involved fraudulently telemarketing dietary supplements, skin creams, and testosterone.
