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The Department of Justice (DOJ) unveiled on Tuesday charges against more than 450 defendants for alleged health care fraud totaling over $6.5 billion in false claims, as part of the Trump administration’s heightened focus on stopping fraud.
It was the second largest amount ever charged in a health care fraud operation, officials said.
Charges were brought against 90 medical professionals for a range of alleged healthcare fraud schemes, including wound care, hospice, adult day care and opioid distribution.
The DOJ’s annual healthcare fraud takedown and fraud enforcement actions also included what the agency said were the largest number of Medicaid fraud defendants and Medicaid fraud loss charged in department history: 295 defendants and over $518 million in false claims.
“The allegations in these cases are particularly disturbing,” Health Secretary Robert F. Kennedy Jr. said during a Justice Department press event. “Some defendants allegedly ordered medically unnecessary tests. Others prescribed products that patients did not need. Some allegedly fueled opioid addiction to increase their own revenue. In certain cases, patients allegedly died, all believing they were receiving legitimate medical care from providers who only viewed them as billing opportunities.”
Officials said DOJ received unprecedented cooperation from states. Cases were brought in 56 federal districts across 45 U.S. states and territories as part of what they described as the department’s largest coordinated antifraud effort to date.
“This is just the beginning. Fraudsters can no longer rip off American taxpayers. If you seek to harm or cheat Americans, we will find you, seize any assets and prosecute you to the fullest extent of the law,” acting Attorney General Todd Blanche said.
For instance, charges were filed against 11 defendants, including a company executive and eight medical professionals, across six districts in connection with billions of dollars in fraudulent claims for skin substitutes.
In one instance, a corporate executive in Arizona was charged in an alleged illegal kickback scheme that enriched the company and the providers who applied it.
According to the Justice Department, the company in question did not manufacture allografts and instead acquired allografts from tissue banks and relabeled them for sale at a 2,000 percent mark-up, charging up to $1,450 per square centimeter.
The defendant is alleged to have paid illegal kickbacks of approximately 40 percent of that amount, allowing marketers and medical providers to pocket approximately $500 to $600 per square centimeter.
“These lucrative kickbacks allegedly caused the defendant and others to target hospice patients and apply the allografts without coordination with the patients’ treating physicians, without proper treatment for infection, to superficial wounds that did not need this treatment, and to areas that far exceeded the size of the wound,” DOJ said in a statement.
The defendant received over $24 million from the company, which he used to purchase multimillion-dollar houses, million-dollar life insurance policies, luxury vehicles, including a $135,000 Maserati, and luxury watches.
In the Southern District of Texas, a nurse practitioner was charged for billing Medicare more than $1 million per patient on average for skin substitutes.
The government said the defendant used the fraud proceeds to purchase a nearly $600,000 Ferrari, a $865,000 Bulgari necklace and a multimillion-dollar home in Hawaii. The defendant also allegedly funded the construction of a $4.6 million beach resort in the Philippines.
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