The nationwide coordinated law enforcement action includes criminal
charges against a telemedicine company executive, owners and executives
of clinical laboratories, durable medical equipment companies, marketing
organizations, and medical professionals.
Additionally, the Centers for Medicare & Medicaid Services (CMS),
Center for Program Integrity (CPI) announced today that it took adverse
administrative actions against 52 providers involved in similar
schemes. In connection with the enforcement action, the department
seized over $8 million in cash, luxury vehicles, and other fraud
proceeds.
“The Department of Justice is committed to prosecuting people who
abuse our health care system and exploit telemedicine technologies in
fraud and bribery schemes,” said Assistant Attorney General Kenneth A.
Polite, Jr. of the Justice Department’s Criminal Division. “This
enforcement action demonstrates that the department will do everything
in its power to protect the health care systems our communities rely on
from people looking to defraud them for their own personal gain.”
The coordinated federal investigations announced today primarily
targeted alleged schemes involving the payment of illegal kickbacks and
bribes by laboratory owners and operators in exchange for the referral
of patients by medical professionals working with fraudulent
telemedicine and digital medical technology companies. Telemedicine
schemes account for more than $1 billion of the total alleged intended
losses associated with today’s enforcement action. These charges include
some of the first prosecutions in the nation related to fraudulent
cardiovascular genetic testing, a burgeoning scheme. As alleged in court
documents, medical professionals made referrals for expensive and
medically unnecessary cardiovascular and cancer genetic tests, as well
as durable medical equipment. For example, cardiovascular genetic
testing was not a method of diagnosing whether an individual presently
had a cardiac condition and was not approved by Medicare for use as a
general screening test for indicating an increased risk of developing
cardiovascular conditions in the future.
“Protecting the American people is at the forefront of the FBI’s
mission,” said Assistant Director Luis Quesada of the FBI’s Criminal
Investigative Division. “Fraudsters and scammers take advantage of
telemedicine and use it as a platform to orchestrate their criminal
schemes. This collaborative law enforcement action shows our dedication
to investigating and bringing to justice those who look to exploit our
U.S. health care system at the expense of patients.”
“Today’s enforcement action highlights our dedication to fighting
health care fraud and investigating individuals who target Medicare
beneficiaries and steal from taxpayers for personal gain,” said
Inspector General Christi A. Grimm of the U.S. Department of Health and
Human Services. “HHS-OIG is proud to work alongside our law enforcement
partners to disrupt fraud schemes that use the guise of telehealth to
expand the reach of kickback schemes designed to cheat federally funded
health care programs.”
One particular case charged involved the operator of several clinical
laboratories, who was charged in connection with a scheme to pay over
$16 million in kickbacks to marketers who, in turn, paid kickbacks to
telemedicine companies and call centers in exchange for doctors’ orders.
As alleged in court documents, orders for cardiovascular and cancer
genetic testing were used by the defendant and others to submit over
$174 million in false and fraudulent claims to Medicare—but the results
of the testing were not used in treatment of patients. The defendant
allegedly laundered the proceeds of the fraudulent scheme through a
complex network of bank accounts and entities, including to purchase
luxury vehicles, a yacht, and real estate. The indictment seeks
forfeiture of over $7 million in United States currency, three
properties, the yacht, and a Tesla and other vehicles.
Some of the defendants charged in this enforcement action allegedly
controlled a telemarketing network, based both domestically and
overseas, that lured thousands of elderly and/or disabled patients into a
criminal scheme. The owners of marketing organizations allegedly had
telemarketers use deceptive techniques to induce Medicare beneficiaries
to agree to cardiovascular genetic testing, and other genetic testing
and equipment.
“The Centers for Medicare & Medicaid Services continues to
aggressively investigate fraud, waste and abuse and has taken action to
protect patients, critical health care resources and to prevent losses
to the Medicare Trust Fund,” said CMS Administrator Chiquita
Brooks-LaSure. “Work like this to combat fraud, waste, and abuse in our
federal programs would not be possible without the successful
partnership of CMS, the Department of Justice, and the U.S. Department
of Health and Human Services Office of Inspector General.”
The charges announced today allege that the telemedicine companies
arranged for medical professionals to order these expensive genetic
tests and durable medical equipment regardless of whether the patients
needed them, and that they were ordered without any patient interaction
or with only a brief telephonic conversation. Often, these test results
or durable medical equipment were not provided to the patients or were
worthless to their primary care doctors.
Today’s announcement builds on prior telemedicine enforcement actions involving over $8 billion in fraud, including 2019’s Operation Brace Yourself, 2019’s Operation Double Helix, 2020’s Operation Rubber Stamp, and the telemedicine component of the 2021 National Health Care Fraud Enforcement Action.
Specifically, the Operation Brace Yourself Telemedicine and Durable
Medical Equipment Takedown alone resulted in an estimated cost avoidance
of more than $1.9 billion in the amount paid by Medicare for orthotic
braces in the 20 months following that enforcement action.
Today’s enforcement actions were led and coordinated by Acting
Principal Assistant Chief Jacob Foster, Acting Assistant Chief Rebecca
Yuan and Trial Attorney Catherine Wagner of the National Rapid Response
Strike Force in the Criminal Division’s Fraud Section. The Fraud
Section’s National Rapid Response Strike Force and the Health Care Fraud
Unit’s Strike Forces (SF) in Brooklyn, Detroit, the Gulf Coast,
Houston, Miami, Newark, as well as the U.S. Attorneys’ Offices for the
District of New Jersey, Eastern District of Louisiana, Eastern District
of Texas, Middle District of Florida, Middle District of Tennessee,
Northern District of Georgia, Northern District of Mississippi, and
Western District of North Carolina are prosecuting these cases.
In addition to the FBI, HHS-OIG, and CPI/CMS, VA-OIG, DCIS, IRS,
MFCU, DEA, and other federal and state law enforcement agencies
participated in the operation.
Prior to the charges announced as part of today’s nationwide
enforcement action and since its inception in March 2007, the Health
Care Fraud Strike Force, which maintains 16 strike forces operating in
27 districts, has charged more than 5,000 defendants who collectively
billed federal health care programs and private insurers approximately
$24.7 billion.
A complaint, information or indictment is merely an allegation, and
all defendants are presumed innocent until proven guilty beyond a
reasonable doubt in a court of law.
The following documents related to today’s announcement are available
on the Health Care Fraud Unit website through the following links:
Telemedicine Enforcement Action (justice.gov)
Telemedicine Court Documents (justice.gov)
Telemedicine Press Releases (justice.gov)
Telemedicine Case Summaries (justice.gov)
Any patients who believe that they have been contacted as part of a
fraudulent telemedicine, clinical laboratory, or DME scheme should call
to report this conduct to HHS-OIG at 1-800-HHS-TIPS.