An anti-fraud task force led by the Justice and Health and Human Services departments reported a record setting number of arrests on Wednesday, announcing charges against 300 defendants in 36 districts for billing schemes worth more than $900 million.
The nine-year-old Medicare Fraud Strike Force executed a “takedown” over the past three days, charging doctors, nurses, pharmacists, physical therapists and home health care providers with such crimes as fraudulent billing, making false statements, bribery and money laundering.
“They submitted dishonest claims, charged excessive fees and prescribed unnecessary drugs,” Attorney General Loretta Lynch said in a press conference with HHS Secretary Sylvia Mathews Burwell and others. “One group of defendants controlled a network of clinics in Brooklyn that they filled with patients through bribes and kickbacks. These patients then received medically unnecessary treatment, for which the clinic received over $38 million from Medicare and Medicaid – money that the conspirators subsequently laundered through more than 15 shell companies,” she said.
In another case, a Detroit clinic that was a front for a narcotics diversion scheme billed Medicare for more than $36 million.
“Although the specific nature of their wrongdoing varied from case to case, all of them betrayed the basic principles of their professions,” said Lynch, who was also accompanied by Assistant Attorney General for the Criminal Division Leslie Caldwell; U.S. Attorney Wifredo Ferrer of the Southern District of Florida; FBI Associate Deputy Director David Bowdich; HHS Deputy Inspector General for Investigations Gary Cantrell; Defense Criminal Investigative Service Acting Director Dermot O’Reilly; and Shantanu Agrawal, deputy administrator and director of the Center for Program Integrity at the Centers for Medicare and Medicaid Services.
Lynch also described new trends in fraud and deception. “In a number of cases involving the Medicare prescription drug benefit program known as Part D, we saw new evidence of identity theft, including the use of stolen doctors’ IDs to prepare fake prescriptions,” she said. “We have also seen a growing number of cases involving compounded medications, which are combinations of two or more drugs prepared by a licensed professional.”
The criminal takedowns are part of the government’s ongoing effort to curb waste, fraud and abuse in government benefits. A report released last month by Deloitte said the annual losses from improper payments had exploded since 2005, rising from $38 billion that year to $137 billion in fiscal 2015. The authors offered ways agencies can proactively prevent the bad payments from going out in the first place, using predictive analytics, behavioral economics and collective intelligence.