US Agencies Nab Scammers After Report on Medicare Fraud

In the wake of a report earlier this month that opened the lid on massive fraud in US hospice services, US government agencies this week announced a new strike force that would deal with the problem and brought several scammers to justice.

Belvoir Community Hospital copyBelvoir Community Hospital By Reese Brown (US Army)

The largest fraud case was in Florida, where the FBI nabbed eight men who set up a slew of pharmacies that scammed the government and private insurers out of US$100 million in the course of four years.

The men started by bribing medical professionals to write unnecessary prescriptions for treatments like pain drugs or scar creams, and then lavishly billing their patients’ insurance. 

When that wasn’t enough, they simply mailed drugs to lists of patients with good insurance, and then billed their insurance.

“In many cases, the patients would send the creams back and say ‘I never asked for this,’” said FBI agent Kurt McKenzie, who works in the FBI’s Miami division. 

The men pleaded guilty to conspiring to commit health care fraud. They’ve been sentenced from one to 15 years in prison. 

In the meantime, the US Department of Justice reports that Post Medical, a company which operated long-term and rehabilitation hospitals across the country, agreed to pay the United States, Texas and Louisiana over $13 million over a series of alleged kickback schemes.

According to the DoJ press release, the company entered into numerous contracts with medical professionals.

While the contracts were ostensibly related to the professionals’ administrative roles, investigators found that they were designed to induce physicians to refer patients to the company’s services, and resulted in a number of false claims to Medicare. 

“PAM’s alleged kickbacks and improper physician relationships threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid,” said the special agent in charge of the investigation.

Finally, the Justice Department’s Criminal Division announced the formation of a Medicare Fraud Strike Force in New Jersey and Pennsylvania, designed to address medical fraud in the region.