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US doctors charged with $1.2bn Medicare fraud

April 11, 2019 11:35 am

An FBI investigation has dismantled a $1bn (£917m) Medicare fraud scheme, one of the largest in history, authorities have announced.

Two dozen people, including doctors and owners of medical equipment companies, face charges of scamming disabled and elderly patients.

The doctors received kickbacks for peddling unnecessary back, shoulder, wrist and knee braces, authorities say.

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The gains were allegedly used to purchase exotic cars, yachts and homes.

Authorities say the global conspiracy involved bribes paid to call centres in the Philippines and throughout Latin America. The investigation was called Operation Brace Yourself.

Durable medical equipment (DME) companies provided kickbacks to these telemarketing companies, which advertised to Medicare beneficiaries and “up-sold” them to accept several DME braces, regardless of need, say investigators.

The telemarketers allegedly encouraged patients to contact doctors by phone or video call in order to maximize efficiency. Doctors involved in the scam were then paid to provide bogus prescriptions for the braces, despite never having met the patients in person.

Two shipping companies indicted in the investigation would allegedly ship low-cost braces made in China to the patients, as the DME companies fraudulently billed Medicare for the cost.

Equipment companies would receive about $500 to $900 for each brace from Medicare and paid kickbacks of almost $300 per brace, according to the Associated Press.

Hundreds of thousands of elderly or disabled patients were lured into the scheme, according to investigators. The indictment says the scam had gone on for five years.

“The American tax system is designed to provide vital government services to our citizens,” said Matthew Line, special agent in charge of the Internal Revenue Service’s criminal investigation division, in a press release.

“It is not a slush fund for thieves and fraudsters.”

Investigators say that proceeds of the scheme were laundered through international shell corporations, then used to buy luxury cars, yachts, and real estate for members of the fraud ring.

So far, there have been 80 search warrants issued in 17 federal districts, with charges brought against 24 defendants. According to the release from the Justice Department, more than 100 equipment companies will have their Medicare payments cut off.

Operation Brace Yourself spanned 20 FBI offices and involved the Department of Health and Human Services inspector general and Internal Revenue Service.

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