The U.S. Department of Justice (DOJ) charged 15 individuals, including six medical professionals, tied to healthcare fraud schemes that allegedly generated roughly $2 billion in fraudulent claims to government and private insurers.
Prosecutors allege four defendants operated a $1.6 billion abuse treatment scheme in California, which the DOJ calls the largest sober-home/substance abuse treatment fraud scheme it has ever prosecuted. Other alleged schemes include $134 million fraudulently billed to Medicare for unnecessary atherectomy procedures resulting in patient injury and more than $138 million in fraudulent Medicare billing for hospice schemes where patients were not terminally ill.
In the unnecessary procedure scheme, the DOJ alleges that a cardiothoracic surgeon and chiropractor billed Medicare for medically unnecessary atherectomies, invasive procedures used to clear plaque from arteries. Prosecutors say that some patients did not have the arterial disease being treated, and some suffered pain and discomfort. DOJ says data analysts identified the physician as an extreme outlier for atherectomy billing, leading to the case.
Eight defendants were arrested Oct. 22, officials said. Another defendant was indicted after previously being charged in a $270 million scheme to defraud California’s Medicaid program, Medi-Cal, through fraudulent prescription pharmacy claims.
Five of the defendants were expected to make their first court appearance Oct. 22 in the U.S. District Court in Los Angeles, while two others were expected to appear in the U.S. District Court in the Northern District of Texas and Northern District of Illinois.
The defendants—including medical professionals—made fraudulent claims to steal from taxpayer-funded healthcare and insurance programs, including substance abuse treatment programs, hospice care and Medicare programs in the Los Angeles area "designed to help the most vulnerable," said Kash Patel, FBI director, in a statement.
"Under President Trump’s leadership with the White House Task Force to Eliminate Fraud, stealing from American taxpayers will no longer be tolerated in this country. This FBI will continue to move aggressively with our Department of Justice to dismantle fraud networks stealing from hard-working taxpayers," Patel said.
Reducing healthcare fraud, especially in Medicaid and Medicare, has been a priority for the Trump administration.
Most recently, U.S. Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, M.D., announced Oct. 21 that the White House would defer an additional $1.2 billion in Medicaid funding from California.
Dan Brillman, director of Medicaid and CHIP at CMS, also said that the agency has submitted a letter to New York officials after raiding about a dozen adult daycare locations. The investigation focused on center operators that allegedly submitted fraudulent Medicaid bills for deceased individuals or those who had received no services.
Brillman said the letter warned officials they're not doing enough to oversee long-term managed care organizations, as those insurers largely manage both the coverage and programs that are generating the alleged fraud.