$1.2B Medicare fraud scheme centered on telemedicine, medical equipment
The alleged scheme involved medical referrals for back, shoulder, wrist and knee braces that were medically unnecessary.
Twenty-four individuals, including the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies and three licensed medical professionals, were charged by the Department of Justice in health care fraud schemes that involved more than $1.2 billion in losses.
The Center for Medicare Services, Center for Program Integrity (CMS/CPI) has also announced taking adverse administrative action against 130 DME companies that had submitted more than $1.7 billion in claims and were paid more than $900 million.
According to the DOJ, the alleged scheme involved illegal kickbacks and bribes paid by DME companies as a reward for Medicare beneficiary referrals by medical professionals who worked with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary.
How it allegedly worked: some defendants controlled an international telemarketing network that lured over hundreds of thousands of elderly and/or disabled patients into a criminal scheme that involved call centers in the Philippines and throughout Latin America. Defendants allegedly paid doctors to prescribe DME for patients they had never seen and may not even had spoken to on the phone, and the proceeds from the scheme allegedly were laundered via international shell corporations, being spent on exotic automobiles, yachts and luxury real estate in the U.S. and abroad.
The exploitation of telemedicine technology took advantage of a system meant for patients who have no other way to access care, and capitalized on its capabilities through luring in patients that included the elderly and disabled who simply sought a respite from pain. Medicare paid for millions of dollars’ worth of devices that were not medically necessary for the patients lured into the scheme.
According to court documents, some defendants contacted patients via an international call center that advertised to Medicare beneficiaries and “upsold” beneficiaries on multiple “free or low-cost” DME braces, whether they needed them or not. The call center then paid kickbacks and bribes to telemedicine companies to get DME orders for these Medicare beneficiaries, then paid off physicians to write up the medically unnecessary DME orders. Then the call center would sell off the DME orders from the telemedicine companies to DME companies, which subsequently submitted fraudulent bills to Medicare.
Collectively, the DOJ says, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in loss.
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