89 arrested in crackdown by Medicare Fraud Strike Force

WASHINGTON, D.C. — Doctors, nurses and other licensed medical professionals were among 89 people recently arrested in nine cities, accused of scheming to defraud the Medicare program of nearly $223 million in false billings, the Obama administration announced Tuesday.

The defendants face charges of conspiracy to commit health care fraud, money laundering and violating federal anti-kickback statutes for submitting claims to Medicare for purchases, treatments and services that, according to federal officials, either were medically unnecessary or never provided.

In many cases, patient recruiters, Medicare recipients and others were paid cash to supply beneficiary information that later was used in billing scams, federal law enforcement officials said. Most of the alleged fraud involved home health care services, but the charges included mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and ambulance services.

“Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price,” Health and Human Services Secretary Kathleen Sebelius said in an afternoon news conference at the Department of Justice. She credited the 2010 health care law, the Patient Protection and Affordable Care Act, with strengthening criminal penalties for Medicare fraud and allowing the health department to suspend payments to providers when fraud is suspected.

In Miami, a hotbed for Medicare fraud, two nurses and a paramedic were among 25 people arrested this week on suspicion of submitting $44 million in false claims. In one case, the lead defendant at a Miami home health care agency, Trust Care Health Services, is accused of using proceeds from a $20 million billing scheme to buy luxury cars: two Lamborghinis, a Ferrari and a Bentley.

In New Orleans, two doctors were among five people the fraud task force charged with trying to steal $51 million from Medicare. In Houston, a nurse and social worker who are brother and sister were charged with making $8.1 million in false billings for home health care services.

The arrests were part of the sixth national crackdown on Medicare fraud carried out by the Medicare Fraud Strike Force, a special unit of the Department of Justice and HHS. Since its creation in 2007, the strike force has charged more than 1,500 people with making more than $5 billion in fraudulent claims against Medicare, the federal health insurance program for seniors.

Strike force efforts to crack down on home health care fraud in Miami have helped cut statewide billing for those services by more than $1 billion in the past two years, while payments to providers fell by roughly $500 million.

“Today’s announcement marks the latest step forward in our comprehensive efforts to combat fraud and abuse in our health care systems,” Attorney General Eric Holder said. “We will use every appropriate tool and available resource to find, stop and punish those who seek to take advantage of their fellow citizens.”

Officials said the arrests resulted in part from new predictive computer technology used by HHS to spot suspicious billing activity and from alert residents who’d notified authorities after they suspected foul play. To help thwart fraud, officials urged Medicare recipients to safeguard their medical information, report suspicious activity by health care recruiters and review their benefit forms regularly for services they may not have received.

Thirteen people face charges in Los Angeles, accused of trying to defraud Medicare of $23 million. Officials claim that the suspects paid recruiters to bribe Medicare recipients into providing their personal information to doctors and medical clinics that the officials allege wrote prescriptions for unnecessary power wheelchairs that then were sold to defendants for illegal kickbacks.

In Detroit, three people who falsely claimed to be licensed doctors face charges in an alleged $12 million billing scheme in which, officials say, they wrote bogus drug prescriptions and submitted false claims for psychotherapy. Holder said that after the strike force had investigated group-psychotherapy fraud in Detroit, claims for this kind of treatment dropped by more than 70 percent since January 2011.

Over the past three fiscal years, every dollar spent fighting health care fraud has returned an average of nearly $8 to the U.S. Treasury and the Medicare Trust Fund, Holder said. But that success is threatened by the across-the-board federal budget cuts known as sequestration, which cut $1.6 billion from the Justice Department’s budget for the current fiscal year, he said.

“Unless Congress adopts a balanced deficit-reduction plan and stops the reductions currently slated for 2014, I fear that our capacity to protect the American people from health care fraud, to safeguard vital programs and precious resources and to hold criminals accountable will be further reduced,” Holder said.