Feds' Big Bust: $1.3 Billion Health Insurance Fraud Takedown
Policy + Politics

Feds' Big Bust: $1.3 Billion Health Insurance Fraud Takedown

Regis Duvignau / Reuters

On the same day that Republican members of the Senate released a pair of bills aimed at repealing and replacing the Affordable Care Act, the Department of Justice highlighted a problem with the nation’s health care delivery system that has nothing to do with premiums, co-pays or pre-existing conditions. In a release Thursday, DOJ reported the arrest of hundreds of people in an anti-fraud enforcement action.

DOJ, working with the Department of Health and Human Services and the Medicare Fraud Strike Force, charged 412 people across the country, including 115 doctors and other licensed medical professionals in false billing operations that cost the federal government some $1.3 billion. Those arrested included more than 120 who face charges of either illegally prescribing or otherwise helping to distribute opioids and other dangerous narcotics.

Related: Crackdown on Medicare Fraud Is Producing Some Impressive Results

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Jeff Sessions. “Amazingly, some have made their practices into multimillion dollar criminal enterprises.”

He added, “While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars - it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” said HHS Secretary Tom Price.

Noting the high cost of fraud to government-run healthcare programs, Price said, the enforcement action, which took place in 41 separate federal law enforcement districts, demonstrates “significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”

Related: Medicaid Fraud Climbed to a Whopping $29 Billion Last Year

Documents released by the Department of Justice say the fraud activity being targeted touched on Medicare and Medicaid, as well as the TriCare program, which serves military veterans and their families.

While suspects were charged in districts across the country, some areas represented a disproportionately large share of defendants. The Southern District of Florida, for example, was home to 77 of those charged in the operation. This included the operator of an addiction recovery center charged with submitting $58 million in fraudulent Medicaid claims.

Federal authorities are charging the owners of the operation with “actively recruiting addicted patients to move to South Florida so that the co-conspirators could bill insurance companies for fraudulent treatment and testing, in return for which, the co-conspirators offered kickbacks to patients in the form of gift cards, free airline travel, trips to casinos and strip clubs, and drugs.”

In the Eastern District of Michigan 32 people were charged in a scheme that involved $218 million in false billing, as well as money laundering, kickbacks, and illegal distribution of drugs. In the Southern District of Texas, authorities charged 26 people with more than $66 million in fraud.

The actions announced today are an extension of a program put in place during the Obama administration meant to crack down on healthcare fraud. The annual nationwide “takedown” of fraud suspects associated with the program has become an expected ritual, but Thursday’s bust was far larger than those of past years.