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Feds announce massive investigation of $2.75B in health care fraud


Justice Department says physicians were involved in schemes across the nation.

© U.S. Department of Justice

© U.S. Department of Justice

Federal investigators announced the National Health Care Fraud Enforcement Action involved more than $2.75 billion in false claims.

On June 27, the U.S. Department of Justice announced criminal charges involving 193 defendants, including 76 doctors, nurse practitioners, and other licensed medical professionals in 32 federal districts across the nation. The various schemes tallied up to actual losses of $1.6 billion, and intended losses of approximately $2.75 billion.

In the nationwide law enforcement action, federal and state law enforcement agents seized more than $231 million in cash, luxury vehicles, gold and other assets. In total, there were 110 federal cases in 32 districts and 35 state cases in 11 states.

“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” Attorney General Merrick B. Garland said in a news release. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”

Among the alleged schemes:

  • A $900 million fraud scheme committed in connection with amniotic wound grafts. Medicare paid more than $600 million to two defendants who owned wound care companies in Arizona. Investigators seized more than $70 million, including four luxury vehicles, gold, jewelry and cash
  • Unlawful distribution of millions of pills of Adderall and other stimulants by five defendants associated with digital technology company Done Health P.C. The charges followed counts against the CEO and clinical president of the company; they have denied the allegations.
  • More than $90 million in fraud committed by corporate executives distributing adulterated and misbranded HIV medication. Three defendants allegedly purchased drugs on the black market and dispensed the medications to unsuspecting patients, at times labeling bottles as one drug but sending another.
  • More than $146 million in fraudulent addiction treatment schemes involving Arizona Medicaid billing for services never provided.
  • More than $1.1 billion in telemedicine and laboratory fraud. The scheme involved 36 defendants in schemes across Texas, New Jersey and Virginia.
  • More than $450 million in other health care fraud and opioid schemes involving 140 defendants.

“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” Health and Human Services Inspector General Christi A. Grimm said in the news release. “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”

Garland published an additional statement about the investigations and the Justice Department published these case details and graphics about the allegations.

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