US Justice Department operation takes down 345 defendants on more than $6B in fraud charges

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In what’s being called the largest health care fraud and opioid enforcement action in the history of the U.S. Department of Justice, officials said they have charged 345 defendants, including more than 100 doctors, across 51 federal districts for more than $6 billion in fraudulent charges.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, Assistant Administrator Tim McDermott of the Drug Enforcement Administration, Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division, and Deputy Inspector General Gary Cantrell of the Department of Health and Human Services Office of Inspector General said the defendants have been charged with submitting more than $6 billion in false or fraudulent claims to federal health care programs and private insurers.

The fraudulent claims include more than $4.5 billion in telemedicine charges, more than $845 million connected to substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other health care fraud and illegal opioid distribution schemes.

“The opioid epidemic our country is battling is exacerbated when unscrupulous individuals seek to profit from people, in particular those confronting addiction,” McDermott said. “When doctors, pharmacists, and individuals exploit the weakness of a fellow human being in order to line their own pockets, DEA will use every tool at its disposal to stop and bring them to justice.”

More than 240 of the defendants allegedly participated in schemes to submit more than $800 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and other private insurance companies for medically unnecessary treatments – many of which were then never provided. The charges also included distributing more than 30 million doses of opioids and other prescription narcotics by healthcare professionals.

More than a dozen individuals were charged with more than $845 million allegedly false and fraudulent claims for tests and treatments for patients seeking treatment for drug and/or alcohol addiction. The scheme involved patient recruiters (known in the industry as “body brokers”) who would bring patients into substance abuse treatment facilities where they were subjected to medically unnecessary drug testing – oftentimes billed for thousands of dollars for each test – and prescribed therapy sessions that frequently weren’t provided, resulting in millions of false and fraudulent claims being sent to private insurance providers. Additionally, the defendants are alleged to have prescribed medically unnecessary controlled substances to get patients to stay at the facility. Patients discharged were often admitted to other treatment facilities or referred to other laboratories and clinics in exchange for kickbacks.

Most of the alleged fraud loss charges were in connection with telemedicine. According to court documents, some defendants were telemedicine executives who allegedly paid doctors and nurse practitioners to order unnecessary equipment, genetic or diagnostic testing, and pain medications, either without ever seeing patients or after having only brief conversations over the phone with patients they had never met. The equipment companies, testing labs, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes. The companies, testing labs, and pharmacies would then submit false and fraudulent claims to Medicare and other government insurers.

In addition to the charges, the Center for Medicare and Medicaid Services’ (CMS) Center for Program Integrity said it has revoked the Medicare billing privileges of 256 additional medical professionals for their involvement in the telemedicine schemes and taking administrative actions concerning the telemedicine fraud.

“Telemedicine can foster efficient, high-quality care when practiced appropriately and lawfully. Unfortunately, bad actors attempt to abuse telemedicine services and leverage aggressive marketing techniques to mislead beneficiaries about their health care needs and bill the government for illegitimate services,” said HHS Deputy Inspector General Cantrell. “Unfortunately, audacious schemes such as these are prevalent and often harmful. Therefore, collaboration is critical in our fight against health care fraud. We will continue working with our law enforcement partners to hold accountable those who steal from federal health programs and protect the millions of beneficiaries who rely on them.”

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