Medicare Fraud Round-Ups Organized for 'Impact'

October 05, 2012

October 5, 2012 — Seven physicians and 84 other individuals across the country have been charged in federal courts with fraudulently billing Medicare for almost $430 million, Obama administration officials announced yesterday.

"This represents one of the largest takedowns in Medicare fraud in department history," Assistant Attorney General Lanny Breuer in the Department of Justice (DOJ) said in a press release.

The size of the takedown is by design. As in previous nationwide busts, the alleged Medicare frauds in various locales were not said to be related. In a press briefing yesterday, an official with the Department of Health and Human Services (HHS) said authorities chose to take action against scattered Medicare cheats on the same day for the sake of both efficiency and "impact."

"It's also important that we send a clear message to the nation that healthcare fraud is an absolute, number-one priority for this administration," said the HHS official, who spoke on the condition of anonymity.

In Wednesday night's presidential debate with Republican challenger Mitt Romney, President Barack Obama said that his administration's war on Medicare and Medicaid fraud has "saved tens of billions of dollars."

Billed Services Never Received, Patients Watched TV Instead

The indictments were filed in Miami, Florida; Chicago, Illinois, Brooklyn, New York; Dallas, Texas; Houston, Texas; Los Angeles, California; and Baton Rouge, Louisiana. Dozens of individuals named in the indictments either surrendered or were arrested Wednesday and yesterday. The 91 individuals charged include not only physicians but also nurses, chiropractors, a psychologist, and a physical therapist. They are accused of crimes such as healthcare fraud, conspiracy to commit healthcare fraud, violations of anti-kickback statutes, and money laundering.

In general, the alleged fraudsters billed Medicare for services that were medically unnecessary and frequently never even provided. More than $230 million in bogus billings involved home healthcare services. Mental healthcare fraud accounted for more than $100 million. Other schemes centered on durable medical equipment and ambulance services.

In one of the more brazen schemes, administrators at a Texas hospital bribed Medicare beneficiaries with cigarettes, food, and hospital-store coupons to participate in partial hospitalization programs, according to court records. The beneficiaries did not receive the $158 million worth of services billed to Medicare, but instead watched television and played games.

Another indictment accuses Joseph Megwa, MD, in Arlington, Texas, and 2 registered nurses of participating in a home-healthcare racket that yielded $100 million in fraudulent Medicare billings. Dr. Megwa allegedly signed stacks of documents without reading them in the course of writing 33,000 prescriptions for more than 2000 beneficiaries over a 5-year stretch.

The indictments in the 7 cities stemmed from the work of the Medicare Fraud Strike Force, a joint operation of the DOJ and HHS that includes federal, state, and local investigators and prosecutors. Since its inception in March 2007, the Medicare Fraud Strike Force has charged almost 1500 individuals who together have falsely billed Medicare for more than $4.8 billion, according to a DOJ press release.

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