Federal officials on Tuesday, April 9, dismantled a $1.2 billion Medicare scam peddling unneeded orthopedic braces to hundreds of thousands of unsuspecting elderly and disabled patients through call centers in the Philippines and in Latin America.
According to the Justice Department, the scheme — which has been described as one of the largest health care frauds in United States history — relied on overseas call centers to pry Medicare numbers from beneficiaries. Twenty-four people were charged, including doctors accused of writing bogus prescriptions.
“These defendants — who range from corporate executives to medical professionals — allegedly participated in an expansive and sophisticated fraud to exploit telemedicine technology meant for patients otherwise unable to access health care,” said Brian Benczkowski, the assistant attorney general for the department’s criminal division, in a statement.
The Associated Press (AP) reported that officials said the profits from the scheme were laundered through offshore shell companies and then were used to purchase exotic cars, yachts, and luxury real estate around the world.
They added that the scam was detected last summer after beneficiaries complained to the Medicare fraud hotline.
Under the scam, telemarketers would reach out to Medicare beneficiaries offering free or low-cost braces. Interested beneficiaries would then be patched through to call centers that are part of an international telemarketing network operating in the Philippines and throughout Latin America, according to AP. Afterwards, they would be connected to telemedicine companies for consultations with doctors, who wrote prescriptions for orthopedic braces, regardless of whether they were necessary or not.
The prescriptions would be collected by call centers and sold to medical equipment companies, which would ship out the braces to beneficiaries and bill Medicare. Medical equipment companies would earn $500 to $900 per brace from Medicare.
Officials noted that charges were being brought against people in California, Florida, New Jersey, Pennsylvania, South Carolina, and Texas.
“The breadth of this nationwide conspiracy should be frightening to all who rely on some form of health care,” IRS criminal investigations chief Don Fort said.
“The conspiracy…details broad corruption, massive amounts of greed and systemic flaws in our health care system that were exploited by the defendants,” he added.
Healthcare fraud has been costing taxpayers tens of billions of dollars every year. Its true extent is unknown, and some schemes involve gray areas of complex payment policies.
The FBI, the IRS, and 17 U.S. attorney’s offices took part in the crackdown of the Medicare scam. (Ritchel Mendiola/AJPress)