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DOJ’s $1.2 Billion In Health Care Fraud Charges – Illustration Of the inside Threat

The Department of Justice (DOJ) today announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes. The nationwide coordinated law enforcement action includes criminal charges against a telemedicine company executive, owners and executives of clinical laboratories, durable medical equipment companies, marketing organizations, and medical professionals.  Telemedicine is the use of telecommunication and information technology to provide clinical health care from a distance. It has been used to overcome distance barriers and to improve access to medical services that would often not be consistently available in distant rural communities. It is also used to save lives in critical care and emergency situations. Whereas Cardiovascular genetic testing (CVD) is a lab procedure that may be performed in the course of cardiology and vascular care to determine the personal risk of cardiovascular disease. Because the risk factor is based on inherited genes Cardiovascular genetic testing (CVD) is considered a family test versus an individual test due to the fact that the same genes are inherited across biological families. Durable medical equipment is any medical equipment used in the home to aid in a better quality of living. It is a benefit included in most insurances. In some cases certain Medicare benefits, that is, whether Medicare may pay for the item. The item is defined by Title XIX for Medicaid

“Wherever there is power, greed and money, there is corruption” – Ken Poirot

Additionally, the Centers for Medicare & Medicaid Services (CMS), Center for Program Integrity (CPI) announced today that it took adverse administrative actions against 52 providers involved in similar schemes. In connection with the enforcement action, the department seized over $8 million in cash, luxury vehicles, and other fraud proceeds.

A Security Professional’s worse nightmare is  Insider Threat – an Insider with a motive:  A need for power, money, jealousy, revenge and so on.  The Insider then has motive, means and opportunity to commit a crime.  For an insider to commit a crime, including voter fraud, is so easy, a caveman can do it.  “Wherever there is power, greed and money, there is corruption” – Ken Poirot

The coordinated federal investigations announced today primarily targeted alleged schemes involving the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies. Telemedicine schemes account for more than $1 billion of the total alleged intended losses associated with today’s enforcement action. These charges include some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme. According to court documents,  medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment. For example, cardiovascular genetic testing was not a method of diagnosing whether an individual presently had a cardiac condition and was not approved by Medicare for use as a general screening test for indicating an increased risk of developing cardiovascular conditions in the future.

One particular case charged involved the operator of several clinical laboratories, who was charged in connection with a scheme to pay over $16 million in kickbacks to marketers who, in turn, paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders.  Orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare—but the results of the testing were not used in treatment of patients. The defendant laundered the proceeds of the fraudulent scheme through a complex network of bank accounts and entities, including to purchase luxury vehicles, a yacht, and real estate. The indictment seeks forfeiture of over $7 million in United States currency, three properties, the yacht, and a Tesla and other vehicles.  

Some of the defendants charged controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly and/or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular genetic testing, and other genetic testing and equipment.

The charges announced today allege that the telemedicine companies arranged for medical professionals to order these expensive genetic tests and durable medical equipment regardless of whether the patients needed them, and that they were ordered without any patient interaction or with only a brief telephonic conversation. Often, these test results or durable medical equipment were not provided to the patients or were worthless to their primary care doctors.

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