Feds charge 24 people in $1.2 billion Medicare scam

The Justice Department on Tuesday announced charges against 24 people in a $1.2 billion Medicare scheme that sold unnecessary orthopedic braces to seniors.

Officials said the scheme involved offering Medicare beneficiaries orthotic braces, saying they were free to them and covered by Medicare. Patients who expressed interest were reportedly patched through to call centers in the Philippines and Latin America that were in on the scam, which would verify the beneficiaries' coverage and transfer them to telemedicine companies.


The call centers collected prescriptions and sold them to medical equipment companies, officials said, which shipped the braces to beneficiaries and billed Medicare for them. The medical equipment companies received Medicare reimbursement of $500 to $900 per brace, for which they paid kickbacks of nearly $300 per brace.

Those charged in the scheme include doctors accused of writing bogus prescriptions, call center owners and medical equipment companies.

The Department of Health and Human Services (HHS) is also taking action against 130 medical equipment companies that billed Medicare a total of $1.7 billion, more than $900 million of which was paid out.

“The telemedicine we are talking about is basically a tele-scam,” said Gary Cantrell, who oversees fraud investigations for the HHS inspector general’s office. “We are not talking about the use of advanced technology to provide better access to care.”

Charges were brought against defendants in multiple states, including California, Florida, New Jersey, Pennsylvania, South Carolina and Texas. Officials reportedly first became aware of the scheme last summer after a series of complaints from beneficiaries to the Medicare fraud hotline and warnings from consumer news organizations.