Nationwide Takedown for Over $450 Million in Healthcare Fraud

One-hundred-seven people charged for filing false claims

After a nationwide takedown by the Federal Medicare Fraud Strike Force, 107 individuals from seven different cities have been charged with filing false claims against Medicare, according to the Justice Department. In total, these Medicare fraud schemes resulted in false billing against Medicare of about $452 million—the largest amount in false claims ever involved in a single takedown. Those charged include a variety of licensed medical professions, such as doctors and nurses.

In addition, the Department of Health and Human Services suspended payments or initiated administrative action against more than 50 other providers based on credible allegations that they were involved in fraud, which were supported by a data-driven analysis of their billing history. Strike force agents executed a total of 20 search warrants connected to ongoing investigations.

The charges against these 107 individuals include healthcare fraud, conspiracy to commit healthcare fraud, money laundering, and violations of anti-kickback statutes.  The alleged Medicare fraud schemes include false claims for services such as:

  • home health care,
  • physical and occupational therapy,
  • mental health services,
  • durable medical equipment (DME),
  • psychotherapy services, and
  • ambulance services.

The complaint alleges that the individuals charged Medicare for services that were never performed or, if performed, were medically unnecessary. In addition, patient recruiters and Medicare beneficiaries were allegedly paid kickbacks for access to their beneficiary information to facilitate fraudulent billing by the providers.

The defendants and the damages were not evenly distributed. Miami residents made up more than half of the total defendants, with 59 individuals from the city charged in the takedown, and accused of participating in fraud schemes amounting to $137 million in false claims. Ten of the Miami defendants were charged with participating in the fraud of a single provider, Health Care Solutions Network, that resulted in about $63 million in false billing. According to court documents, therapists with Health Care Solutions Network were told to change medical records to justify providing community mental health services to patients who did not need them.

In Baton Rouge, seven individuals were charged with participating in healthcare fraud that resulted in $225 million in fraudulent billing for community mental health services—nearly half the total amount.  Court documents allege that these individuals recruited Medicare beneficiaries from homeless shelters and nursing homes, including people who were mentally ill or suffering from drug addiction. Using their beneficiary information, the defendants billed Medicare for services that were not medically necessary or that were never provided.

Nine defendants in Houston, including a doctor and a nurse, were accused of making false claims against Medicare for $16.4 million for ambulance services and home health care.  Four different ambulance companies were involved in the scheme, billing Medicare for medically unnecessary ambulance rides.

In Los Angeles, eight individuals, including two doctors, allegedly participated in schemes that resulted in about $14 million in false claims against Medicare. Allegedly, two defendants alone filed false claims against Medicare for over $8 million in DME.

Detroit was represented by 22 defendants, charged with participating in schemes to make about $58 million in false claims against Medicare.

Compared to many of the other cities, Tampa and Chicago appear to have had relatively minor roles. A Tampa pharmacist has been accused of illegally diverting controlled substances, and an individual in Chicago was charged with participating in a scheme to file about $1 million in false claims for psychotherapy services.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud casesContact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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