Major takedown charges 94 with $251 million in Medicare fraud

The U.S. Justice and Health and Human Services departments charge 94 individuals in five states for allegedly submitting $251 million in fraudulent claims to Medicare.

In the largest takedown since the U.S. Dept. of Justice and the Health & Human Services Dept. began collaborating to prosecute Medicare fraud three years ago, 94 individuals were charged across five states for allegedly submitting a combined $251 million in fraudulent claims.

The charges allege fraudulent claims for HIV/infusion services, home health care, physical therapy and durable medical equipment in Miami, Baton Rouge, La., Brooklyn, Detroit and Houston. The agencies say the individuals overcharged the government so they could pocket reimbursement money.

Kirk Ogrosky, who three years ago created the multi-agency Medicare Fraud Strike Force, known as the Health Care Fraud Prevention & Enforcement Action Team or “HEAT,” told the Wall Street Journal‘s Health Blog that the most-quoted annual estimate for the cost of Medicare fraud to the federal government is $60 billion.

The Affordable Care Act included $500 million to put more FBI and HHS agents and prosecutors onto the task force and stipulated better information sharing across agencies. The healthcare overhaul also included more severe penalties for those convicted of Medicare fraud and forced more scrutiny of the durable medical equipment industry, which is frequently used for false upcoding in Medicare fraud cases.

In June, HHS secretary Kathleen Sebelius and U.S. attorney general Eric Holder asked states attorneys general for help in cracking down on Medicare fraud. The localization of those efforts may pay off. Ogrosky told the WSJ that “scams are very regional, because people in a given area replicate them. Criminals are not creative; they learn them ’ they learn what billing codes to use, how to recruit patients.”

The efforts of the HEAT program are already paying off. The Justice Dept. reported last year that about two-thirds of the $2.4 billion it collected from false claims prosecutions during fiscal 2009 were healthcare-related.