WASHINGTON • Federal agents Tuesday broke up a billion dollar Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors. Two dozen people were charged, including doctors accused of writing bogus prescriptions.
The Justice Department said the scheme relied on overseas call centers to pry Medicare numbers from beneficiaries. Authorities also announced charges against owners of call centers, telemedicine firms and medical equipment companies that shipped unneeded back, shoulder, wrist and knee braces.
Profits from the scheme were laundered through offshore shell companies and then used to buy high-end cars, yachts and luxury homes here and abroad, officials said.
Medicare’s anti-fraud unit said it’s taking action against 130 medical equipment companies implicated. The companies billed the program a total of $1.7 billion, but not all of it was paid out. The loss to Medicare was estimated at more than $1.2 billion.
The Health and Human Services inspector general’s office said the fast-moving scam was fueled by kickbacks among the parties involved. The FBI, the IRS and 17 U.S. attorney’s offices took part in the crackdown.
“The telemedicine we are talking about is basically a tele-scam,” said Gary Cantrell, who oversees fraud investigations for the HHS inspector general’s office. “We are not talking about the use of advanced technology to provide better access to care.”
Officials said the scam was detected last summer as complaints from beneficiaries poured in to the Medicare fraud hotline.
They said telemarketers would reach out to seniors offering “free” orthopedic braces, also touted through television and radio ads. Interested beneficiaries would be patched through to call centers, part of what officials described as an “international telemarketing network” with operations in the Philippines and throughout Latin America.
Experts say part of the problem is that Medicare is required to pay medical bills promptly, which means money often goes out before potential frauds get flagged.
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