Feds take down 89 people in eight cities in Medicare fraud totaling $223 million

The federal government has uncovered a string of alleged Medicare fraud attempts totalling $223 million and involving 89 individuals in eight cities.

The joint investigation by the Department of Health and Human Services and the Department of Justice was the sixth national Medicare fraud takedown by the six-year-old Medicare Fraud Strike Force, which to date has charged some 1,500 individuals accused of falsely billing Medicare more than $5 billion.

The alleged schemes announced this week took place in California, Illinois, Florida, Michigan, Louisiana and Texas, and about a quarter of the individuals charged are doctors, nurses and medical professionals, Justice Department officials said.

They're accused of a range of fraud-related crimes -- conspiracy to commit healthcare fraud, violations of anti-kickback statutes and money laundering -- involving mostly home healthcare services, in addition to mental health services, occupational therapy, durable medical equipment and ambulance services. Most of the services billed for reimbursement were never provided and others were medically unnecessary.

In Baton Rouge, Louisiana, five individuals accused of leading a $51 million home health scheme allegedly offered low-income beneficiaries cash payments for their patient information. In other cases, patient recruiters or Medicare beneficiaries themselves were paid cash kickbacks.

"Disturbingly," said acting assistant Attorney General Mythili Raman, in Detroit three individuals charged in a $12 million scheme posed as physicians and signed prescriptions for drugs. In another case in Detroit, 18 individuals, including two doctors, were charged for fraud schemes involving about $49 million in alleged false claims for medically unnecessary services.

In Miami, 25 individuals, including two nurses, a paramedic and a radiographer, were charged for participating in a number of fraud schemes totaling some $44 million in false billings for home and mental health services, occupational and physical therapy, durable medical equipment and HIV infusion. Those defendants allegedly bribed beneficiaries for their Medicare information, which was used for home health services not provided or deemed medically unnecessary.

The alleged leader of the scheme, Raman noted, has already spent much of money on two Lamborghinis, a Ferrari and a Bentley, among other luxury cars.

The announcement of the crackdown came on the same day that a former program coordinator at a defunct Miami-area healthcare provider was sentenced to five years in prison for her role in a $63 million fraud scheme. The woman, also a therapist, was allegedly aware that the mental health treatment center paid illegal kickbacks to owners and operators of an assisted living facility in exchange for patient referral information used to submit false and fraudulent claims to Medicare and Medicaid.

Over the past several years, and especially with new authority under the Affordable Care Act, HHS and other federal agencies have been aggressively targeting Medicare and Medicaid fraud -- at a time when Medicare spending is at record highs and only set to grow.

The exact amount of CMS money lost to fraud remains unknown. The Rand Corporation has pegged Medicare and Medicaid fraud at $98 billion in 2011, while the Government Accountability Office estimates that some $48 billion in Medicare dollars alone is lost broadly to improper payments each year. Regardless of the exact amount, HHS Secretary Kathleen Sebelius said the agency is using new authority and new technologies, like predictive modeling, to try to prevent fraud.

"By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars," Sebelius said a press conference. "Today we're sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price."