Expansive Medicare Fraud Scheme Uncovered

ALEXANDRIA, VA— On Tuesday, April 9, the U.S. Department of Justice announced multiple indictments and law enforcement actions related to one of the nation’s largest health care fraud schemes. These charges are a result of an investigation by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and are being prosecuted by the Department of Justice.

“ABC strongly supports the actions of CMS and the Justice Department in addressing fraud, waste and abuse in the DMEPOS benefit. We will continue to encourage Medicare to continue this level of rigorous enforcement as well as establishing appropriate requirements for qualified providers of orthotic care,” says Larry D. Word, CPO, FAAOP, ABC President.    

The investigation resulted in charges against 24 defendants, including the CEOs, COOs and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies and three licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $1.2 billion in loss. In addition, the Center for Medicare Services, Center for Program Integrity (CMS/CPI) announced that it took adverse administrative action against 130 DME companies that had submitted over $1.7 billion in claims and were paid over $900 million.

“Today, one of the largest health care fraud schemes in U.S. history came to an end thanks to close collaboration and coordination between the FBI and partners including HHS-OIG and IRS-CI,” said FBI Assistant Director Robert Johnson. According to allegations in court documents, some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and ‘up-sold’ the beneficiaries to get them to accept numerous ‘free or low-cost’ orthoses, regardless of medical necessity.

According to Cathy Carter, ABC Executive Director, “The entire profession should be encouraged by the actions taken by the Department of Justice and CMS to address the fraudulent provision of orthoses through this criminal scheme.” 

ABC will continue its diligent establishment of standards for safe and effective orthotic and prosthetic patient care to help protect patients and the profession from fraud and abuse such as this.