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Feds Crack Down in $452 Million Medicare Fraud Sweep

Wednesday, 2 May 2012 | 3:31 PM ET

More than 100 people are charged in what authorities say is the largest one-day takedown ever for Medicare fraud. A federal health care fraud strike force conducted raids in seven cities, targeting more than $450 million in alleged false billing.

Adam Gault | Getty Images

At a news conference in Washington, D.C., to announce the arrests, Attorney General Eric Holder said they “underscore the Justice Department’s determination to move aggressively in bringing to justice those who would violate our laws and defraud the Medicare program for their personal gain.”

The arrests are the latest in a three-year crackdown on health care fraud, which is estimated to cost taxpayers between $80 and $160 billion per year. Authorities recovered a record $4.1 billion last year.

The 107 people charged Wednesday include doctors, nurses and other health care professionals in seven cities: Miami, Tampa, Chicago, Detroit, Houston, Los Angeles and Baton Rouge.

Government Announces Massive Crackdown on Medicare Fraud
CNBC's Scott Cohn reports $453 million, 7 cities and 108 people have been charged in an alleged Medicare fraud case.

In addition, the government has suspended payments to 52 provider organizations the individuals are associated with. Health and Human Services Secretary Kathleen Sebelius said the operation, including the arrests and the cutoff of payments, is part of an effort to get ahead of fraud instead of relying on the old “pay-and-chase” model.

“Now, we’re analyzing patterns and trends and claims data, instead of just going claim by claim,” Sebelius said.

Nonetheless, according to court filings, the defendants were allegedly able to carry out their schemes for years.

In Baton Rouge, seven defendants are accused of submitting more than $225 million in false claims for mental health services in a scheme that began in 2005 and continued until last October. That case alone is one of the largest Medicare fraud cases ever. The defendants allegedly recruited beneficiaries from nursing homes and homeless shelters.

In Miami, more than 50 professionals were charged in an alleged $137 million scam involving mental health services and home health care.

Other cases involved fraudulent billing for ambulance services, durable medical equipment, psychotherapy and prescription drugs.

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