Justice Department Says Push Rounded Up 78 Healthcare Swindlers

The cases include alleged schemes targeting some of the most vulnerable patients in the healthcare system, including the elderly, disabled, and those diagnosed with HIV. 

“The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs,” Attorney General Merrick Garland said.

In one of the cases, the Justice Department was pursuing charges in what Garland called one of the largest healthcare fraud schemes ever prosecuted.

It involves current and former executives of purported software and services companies charged with conspiring to generate and sell false and fraudulent physicians’ orders for pain creams and orthotic braces in exchange for bribes and kickbacks. 

The companies operated an internet platform, DMERx, that created orders and prescriptions that falsely represented that Medicare beneficiaries had been examined and treated by physicians, federal prosecutors said. In fact, they said, purported telemedicine companies had paid physicians to sign the documents without regard to medical necessity. 

In some cases, the orders and prescriptions were based on only a brief telephone call with the Medicare beneficiary or sometimes with no interaction at all, according to the government.

The Justice Department alleged that the conspiracy resulted in the submission of $1.9 billion in false and fraudulent claims to Medicare and other government insurers for braces, prescription creams and other items that were medically unnecessary and ineligible for reimbursement.

One case alleged that a Wisconsin business owner preyed on low-income pregnant women by luring them to sign up for prenatal services, then submitting false claims for services that were never provided. In another prosecution, the owner of a wholesale pharmaceutical-distribution company was charged with illegally buying diverted HIV medication, then reselling the drugs.

In some of the cases, prosecutors alleged that the defendants defrauded programs for the elderly and disabled to bankroll luxurious lifestyles marked by yachts and expensive cars. The Justice Department seized or froze millions of dollars worth of assets including automobiles, cash and real estate as part of the enforcement action, officials said Wednesday.

Prosecutors brought charges in eastern Washington state against a licensed physician accused of signing more than 2,800 fraudulent orders for orthotic braces, including for patients whose limbs had already been amputated. The physician took less than 40 seconds to review and sign each order, prosecutors said.

Twenty-four physicians and other licensed medical professionals were charged with submitting more than $150 million in false billings in connection with allegedly illegal opioid distribution and other healthcare fraud. Among that group were doctors charged with providing patients with opioids they didn’t need.

In one case in Ohio, prosecutors charged a pair of physicians with doling out prescribed pain medications while ignoring red flags that their patients were diverting or abusing them.

“When individuals divert addictive opioid medications for personal gain, they are knowingly putting Americans at risk, all too often causing harm and even death,” said Anne Milgram, head of the Drug Enforcement Administration. “DEA is committed to taking decisive action to hold accountable anyone who participates in these dangerous schemes.”

Write to C. Ryan Barber at [email protected]