Dozens of Indictments, 36 Arrested for Medicare Fraud Totaling $251M


Thirty-six people in five different states have been arrested, and 94 indicted, in connection with a Medicare insurance scam totaling over $250 million, say federal authorities.

Doctors, nurses and other health-care professionals were nabbed in a series of raids that took place early Friday morning in Miami, New York City, Detroit, Houston and Baton Rouge, Louisiana. The medical professionals are accused of billing Medicare fraudulently for unnecessary equipment as well as physical and occupational therapy, diabetic services and HIV treatments that the patients never received.

Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced at a health care fraud prevention summit in Miami that over 360 federal agents were involved in the raids, making this organized crackdown the biggest sweep of Medicare fraud offenders since the taxpayer-funded program began in 1965.

“With today’s arrests we’re putting would-be criminals on notice: Healthcare fraud is no longer a safe bet,” said Holder.

In Brooklyn, undercover agents and wiretaps uncovered a fraud network allegedly run by the Russian mob, in which clinic owners paid patients—many of whom were elderly Russian immigrants—to use their Medicare numbers, and awarded bonus fees for recruiting new patients. There was even a “kickback” room, in which a man sat at a table and made payments to patients. Soviet-style posters on the wall warned visitors to the room against talking about the arrangement.

The scam in Brooklyn is said to have totaled $72 million; eight people were charged in connection with the medical center where this fraud took place.

In another case in Brooklyn, six patients were indicted for having shopping their Medicare numbers to different clinics. One woman had over 3,744 claims submitted on her behalf over a period of six years. None of those patients received the services or health care that were billed, said authorities.

Three healthcare operators in Detroit were accused of setting up HIV clinics, allegedly to treat patients who either did not need the therapy in the first place, or who needed it but did not receive it. In Miami, one doctor is said to have received kickbacks when he referred patients to home healthcare agencies for unnecessary, and costly, diabetic services. Miami was the location of the lion’s share of the fraud, with approximately 25 suspects charged with fleecing taxpayers to the tune of $103 million.

Medicare fraud accounts for an estimated $60 billion to $90 billion a year in the United States. Eradicating it will be an important step in President Obama’s proposed overhaul of the health care system, and task forces in several cities have been established in order to fight fraud.


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