Healthcare fraud continues to plague the industry – each year Medicare and Medicaid suffer over $100 billion in losses from fraudsters. Prosecuting fraud cases in the healthcare industry is like shooting fish in a barrel – there are an infinite number of targets.

To publicize its efforts, each year, DOJ executes multiple nationwide takedowns, rounding up healthcare fraudsters across the nation.  In its most recent nationwide takedown, DOJ arrested 78 defendants on healthcare fraud and opioid abuse schemes totaling over $2.5 billion in fraud.

Most of the cases charged involved fraud schemes against programs designed to pay for the elderly and disabled.  As noted by DOJ, the defendants used the proceeds to purchase luxury items, including automobiles, jewelry and yachts.

Telemedicine Fraud: DOJ charged 11 defendants with the submission of over $2 billion in fraudulent claims stemming from telemedicine schemes. In one of the largest healthcare fraud schemes ever prosecuted, an indictment in Miami, Florida, charged the CEO, former CEO and VP of Business Development for a software and services company with the submission of $1.9 billion in false claims connected to doctors’ orders for orthotic braces and pain creams which were medically unnecessary or ineligible for reimbursement.  The scheme was carried out using a large telemarketing operation to target elderly and disabled with direct mail, television advertising and other marketing efforts to trick them into purchasing unnecessary medical equipment and prescriptions.  The defendants programmed the software platform to generate false and fraudulent orders for telemedicine practitioners to sign and obstruct Medicare investigations by concealing that the interactions with beneficiaries had occurred remotely using telemedicine. The program-generated orders falsified certifications that the telemedicine doctors had examined the beneficiaries in person, and falsified diagnostic testing that Medicare required for brace orders. 

In another telemedicine fraud case, a physician was charged for signing more than 2800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. As alleged, the physician took less than 40 seconds to review and sign each order.

Pharmaceutical Fraud: DOJ charged 10 defendants for the submission of over $370 million in fraudulent claims for prescription drugs. In one case, the owner and corporate officer of a pharmaceutical wholesale distribution company was charged for an alleged $150 million fraud scheme in which the company purchased illegally diverted prescription HIV medication, and then marketed and resold the medication by falsely representing that the company acquired it through legitimate channels. The defendant allegedly purchased the diverted medication at a substantial discount from individuals who obtained the drugs primarily through illegal “buyback” schemes in which they paid HIV patients cash for their expensive HIV medication and repackaged those pills for resale. To cover up their scheme, the defendant and others falsified labeling and product tracing documentation to make it appear legitimate. Pharmacies purchased the misbranded medications, dispensed them to patients, and billed them to health care benefit programs, all while the defendants reaped substantial illegal profits. 

Opioid Distribution: DOJ charged 24 physicians with illegally providing patients with opioids and clinical testing services they did not need.  The illegal prescriptions and clinical testing fraud exceeded $150 million in false billings. DOJ also charged healthcare companies, physicians, and other providers paid cash kickbacks to patient recruiters and beneficiaries in return for patient information, so that the providers could submit fraudulent bills for Medicare reimbursement.