DOJ Busts Historic 412 With $1.3 Billion In Largest Ever Healthcare Fraud Takedown

The U.S. Department of Justice (DOJ) has just hit its largest health care fraud enforcement action in history, bringing charges against 412 defendants in 41 federal districts for their purported involvement in $1.3 billion worth of fraud schemes and false billings, the Justice Department announced Thursday.

DOJ Busts Historic 412 With $1.3 Billion In Largest Ever Healthcare Fraud Takedown

Charges against the defendants include allegations of illegal kickbacks for beneficiary referrals and billing Medicare, Medicaid and TRICARE for medically unnecessary treatments and/or treatments that facilities never provided.

Over 120 of the defendants also face charges for unlawful prescription narcotic distribution.

DOJ Claims Physicians Illegally Profit from Medically Unnecessary Treatments / Drugs Never Rendered

The record-setting enforcement action targeted medical professionals attempting to profit from Medicare, Medicaid and TRICARE by prescribing medically unnecessary drugs and expensive compounded medications. In many cases, health care facilities billed federal and state government programs for drugs that the facility never even ordered or delivered to patients.

To further increase their profits, many physicians and other medical professionals allegedly paid cash kickbacks to patient recruiters and even beneficiaries themselves in exchange for beneficiary patient referrals.

“Health care fraud is a reprehensible crime.  It not only represents a theft from taxpayers who fund these vital programs, but impacts the millions of Americans who rely on Medicare and Medicaid,” said Inspector General Daniel Levinson of the Department of Health and Human Services (HHS) Office of Inspector General. “In the worst fraud cases, greed overpowers care, putting patients’ health at risk.”

In one case, the DOJ charged the owner of a Southern Florida addiction treatment center and one other individual with submitting over $58 million in fraudulent claims. The defendants allegedly offered drug addicts free gift cards, airline travel, drugs, strip club and casino trips as long as they agreed to move to South Florida and participate in their treatment programs.

In another case, a Florida defendant falsely claimed to be a retired U.S. Navy Submarine Service Lieutenant Commander so he could gain information about TRICARE beneficiaries to defraud $4 million from veterans and armed forces members.

“Every defendant in today’s announcement shares one common trait - greed,” said Chief Don Fort of IRS Criminal Investigation. “The desire for money and material items drove these individuals to perpetrate crimes against our healthcare system and prey upon many of the vulnerable in our society.”

Illegal Opiate Sales Equal “Emergency Rooms, Jail Cells and Graveyards”

Equally (or perhaps more) disturbing, the DOJ charged more than 29% of the 412 defendants with the unlawful distribution of opioids and other narcotics. Big-pharma and personal greed is placing profits over the value of human life.

Opioid addiction, opioid-related health problems and death from overdose have reached record highs, largely due to doctors illegally prescribing these mega-addictive medications. Opioid-related overdoses result in 91 U.S. deaths each day, according to the U.S. Centers for Disease Control and Prevention.  

“Last year, an estimated 59,000 Americans died from a drug overdose, many linked to the misuse of prescription drugs,” said the Drug Enforcement Administration’s Acting Administrator Chuck Rosenberg. “This is, quite simply, an epidemic.”

In Eastern Michigan, the DOJ charged six doctors with allegedly prescribing medically unnecessary narcotics - some sold on the street.

A Houston physician and pain management clinic owner (reportedly Houston’s highest hydrocodone prescribing clinic) are charged with paying $300 cash to between 60 and 70 patients a day as long as they accepted a prescription for hydrocodone.

In Connecticut, the DOJ charged two physicians with fraudulently billing Medicaid for oxycodone prescriptions while knowing the prescriptions weren’t medically necessary. 

The DOJ charged a Southern Louisiana pharmacist with billing TRICARE for $192 million in compounded medications that weren’t medically necessary and were based on prescriptions achieved using illegal kickback payments.

“Amazingly, some [medical professionals] have made their practices into multimillion dollar criminal enterprises,” said Attorney General Jeff Sessions. “They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards.”

Medicare Strike Force Targets Illegal Drug Dealing, Kickbacks, Money Laundering

Formed in 2007, the Medicare Fraud Strike Force is part of a joint initiative between the DOJ and the HHS that focuses on enforcing anti-fraud laws and preventing and deterring U.S. healthcare fraud. In the past 10 years, the Medicare Fraud Strike Force has charged more than 3500 defendants with $12.5 billion in false Medicare billings across nine U.S. “hotspots.”

Today’s charges involving Medicare Strike Force targets include:

  • Southern District of Florida: 77 defendants charged with participation in over $141 million in false billings for services including home health care, mental health services and pharmacy fraud.
  • Eastern District of Michigan: 32 defendants charged with participating in approximately $218 million in false claims for medically unnecessary services or services never provided, plus money laundering and kickbacks.
  • Southern District of Texas: 26 defendants charged with taking part in over $66 million in false billings, in part for allegedly paying patients $300 cash to accept medically unnecessary hydrocodone prescriptions.
  • Central District of California: 17 defendants charged with participating in approximately $147 million in fraudulent claims and receiving payments for prescription drugs that were never filled nor supplied to patients. 
  • Northern District of Illinois: 15 defendants charged with over $12.7 million in fraudulent billing, kickbacks and wire fraud for home health care and physical therapy services that were medically unnecessary or never provided.
  • Middle District of Florida: 10 defendants charged with participating in nearly $14 million in fraudulent billing.
  • Eastern District of New York: 10 defendants charged with participating in over $151 million in false billings involving money laundering, kickbacks and services never rendered.
  • Southern Louisiana Strike Force (Eastern and Middle Districts of Louisiana and Southern District of Mississippi): 7 defendants charged with over $207 million false billings involving wire fraud, healthcare fraud and kickback schemes.

In addition to the Medicare Strike Force hotspot enforcement actions, the DOJ charged 117 defendants with fraudulently billing Medicare and TRICARE programs and an additional 96 defendants with defrauding state Medicaid programs (out of over $31 million).

DOJ Holds Individual Medical Professionals Accountable

In recent years, the DOJ is specifically focusing on holding individuals – not just healthcare facilities – accountable for healthcare fraud schemes. In today’s charges, the Medicare Strike Force and 30 state Medicaid Control Units aided in the arrests of the 412 defendants, 115 of which are licensed medical professionals. In addition, the HHS initiated suspensions for 295 healthcare providers (including nurses, physicians and pharmacists).

According to the DOJ, “Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.”

Cash Awards Available for Inside Information on Healthcare Fraud

The DOJ isn’t messing around when it comes to fighting U.S. healthcare fraud, and with President Trump’s 2017 proposed Health Care Fraud and Abuse Control Program budget of $70 million, things aren’t going to be getting any easier for medical professionals who opt to put greed over patient care.

This means big opportunity for healthcare workers with inside information on fraud. Federal and state False Claims Acts offer up to 30% of the total government recovery as a cash whistleblower award to individuals whose information leads to a successful recovery of funds. With the millions – potentially billions – of dollars involved in cases of healthcare fraud, most whistleblower awards equal hundreds of thousands to millions of dollars.

“While today is a historic day, the Department's work is not finished,” said Attorney General Sessions. “In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

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