DOJ Breaks Up $1.2 Billion Medicare Telemedicine Fraud Ring

Ken Terry

April 10, 2019

Federal courts across the country have charged 24 individuals with involvement in an international fraud operation that bilked Medicare of more than $1.2 billion for medically unnecessary orthopedic braces.

The defendants include executives of call centers, telemedicine firms, and durable medical equipment (DME) companies and three "licensed medical professionals."

The alleged scheme involved kickbacks and bribes paid by the DME firms to an international call center network in exchange for fraudulent orders allegedly written by physicians working for telemedicine firms. The DME companies then billed Medicare for the back, shoulder, wrist, and knee braces they provided to customers. Hundreds of thousands of seniors were targeted.

The Centers for Medicare & Medicaid Services, which worked closely with the Department of Justice (DOJ) on the case, has suspended payments to 130 DME companies that allegedly submitted over $1.7 billion in fraudulent claims and were paid over $900 million.

Among the states where federal prosecutors in the DOJ's Medicare Strike Force have brought charges are New Jersey, Florida, Texas, Pennsylvania, and California. Other enforcement actions have been taken in South Carolina, Nebraska, Missouri, and Washington.

According to a DOJ press release, the scheme used telemarketers to contact Medicare beneficiaries about "free or low-cost" braces. The offer was also advertised on radio and television, according to the Associated Press.

Interested seniors were directed to call centers controlled by the defendants in the Philippines and Latin America. If they accepted the offer, they were transferred to one of the telemedicine companies involved in the scheme.

The call center network allegedly paid kickbacks and bribes to these telemedicine companies to obtain DME orders for these beneficiaries. The telemedicine firms allegedly paid physicians to write the medically unnecessary DME orders without seeing the patients or, in some cases, without even talking to them. Then the call center sold the orders to the DME companies.

Among the entities that are specifically named in connection with these alleged schemes are Video Doctor USA, AffordaDoc, WebDoctors Plus, Integrated Support Plus, and First Care MD.

The investigation is ongoing. In the DOJ news release, the department asks physicians and other medical professionals "who have been involved with alleged fraudulent telemedicine and DME marketing report this conduct to the FBI hotline at 1-800-CALL-FBI."

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