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December 30, 2015

The Biggest Medicare Fraud Cases of 2015

Summary:

The FBI says that 3% to 10% of Medicare billing is fraudulent and that healthcare fraud costs U.S. taxpayers tens of billions of dollars a year.

Photo Courtesy of Douglas Palmer

Medicare does not keep records of how much it loses annually because of fraud, but the FBI, which oversees the investigation and prosecution of those alleged to have participated in fraud, estimates that 3% to 10% of all Medicare billings are fraudulent. The FBI task force believes that healthcare fraud costs taxpayers “tens of billions of dollars a year.”

Here is an overview of some of the biggest Medicare fraud cases of 2015:

  1. In June 2015, 243 healthcare providers across the country were charged individually with Medicare fraud. This was the largest-ever coordinated takedown in the history of the National Medicare Fraud Strike Force history. Doctors, nurses, pharmacists, home health workers and other healthcare professionals were all indicted for falsely billing Medicare for approximately $712 million in various fraudulent schemes. The healthcare providers allegedly:
  • Billed for services that were not rendered
  • Charged for equipment that was never delivered
  • Billed for care that was not needed

Specific criminal charges include:

  • Conspiracy to commit healthcare fraud
  • Violating anti-kickback statutes
  • Money laundering
  • Identity theft

Healthcare providers nationally were included in the sweep of the task force. Charges were brought in Texas, Louisiana, Florida, California, New York and elsewhere. The defendants face years in prison in addition to having their assets forfeited to the government and having to repay the amount of money they fraudulently obtained.

In a press release announcing the takedown, the attorney general for the U.S. expressed the commitment of the Department of Justice to continue its “focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives.”

  1. Also in June 2015, the former president of a Houston hospital was sentenced to more than 40 years in federal prison and ordered to pay $46.8 million in restitution to Medicare. His son and two other co-conspirators were also found guilty of receiving kickbacks, conspiracy to commit Medicare fraud and money laundering. The scheme involved billing Medicare for psychiatric services that were never provided to patients. The total amount of money fraudulently received by all participants was estimated to equal $158 million.
  1. In October 2015, Millennium Health in Boston, formerly Millennium Laboratories, admitted to billing Medicare and other governmental healthcare programs more than $256 million for laboratory tests that were either unnecessary or never actually performed. The lab also provided kickbacks to physicians for referring patients for testing. Millennium, with headquarters in San Diego, is one of the largest urine-testing laboratories in the U.S. According to the Massachusetts U.S. attorney, “Millennium promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs. A laboratory which knowingly conducts medically unnecessary testing operates unlawfully and squanders our precious federal health care resources.”
  1. In August 2015, a New York man who operated several healthcare clinics for treating HIV/AIDS patients was sentenced to more than seven years in federal prison for defrauding Medicare out of more than $31 million. He billed for treatment that patients did not need and often were not given. Medicare was billed for infusion or IV treatment for many patients who never received treatment. Some patients who were provided infusion therapy were administered doses that were highly diluted.
  1. Two psychologists were recently added to an indictment to join two of their cohorts who had previously been charged with defrauding Medicare of more than $25 million. The psychologists are owners of two companies that provide psychological testing to nursing home patients in four Gulf Coast states: Alabama, Florida, Louisiana and Mississippi. The problem is that the psychologists allegedly billed Medicare for tests that were not medically necessary and, in many cases, were never performed. The case is pending, and the press release notes that the defendants are presumed innocent until proven guilty.

The Medicare Fraud Strike Force, since its formation in March 2007, has charged 2,300 defendants with fraudulently billing more than a total of $7 billion. The task force is committed to continuing its work to hold providers accountable so that the number of fraudulent providers will decrease.

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About the Author

Nori De Jesus leads the marketing team at Column Case Investigative. De Jesus brings more than 20 years of experience as a marketer and business strategist. Column Case Investigative develops case management software for organizations conducting investigations.

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