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Feds announce biggest-ever Medicare fraud, totaling $450 million

Federal prosecutors have charged 107 people, including doctors and nurses, in seven U.S. cities, accusing them of taking part in schemes to cheat the Medicare system out of $452 million through phony billing. Authorities are calling this the largest one-day takedown ever by the government’s Medicare fraud task force.

At a news conference Wednesday, Attorney General Eric Holder said they “underscore the Justice Department’s determination to move aggressively in bringing to justice those who would violate our laws and defraud the Medicare program for their personal gain.”

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The 107 health care professionals, also including social workers and owners of health care companies, charged Wednesday worked in Miami, Tampa, Chicago, Detroit, Houston, Los Angeles and Baton Rouge.


The arrests are the latest in a three-year crackdown on health care fraud, which is estimated to cost taxpayers between $80 and $160 billion per year. Authorities recovered a record $4.1 billion last year.

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The government has also suspended payments to the 52 provider organizations where the individuals worked. Health and Human Services Secretary Kathleen Sebelius said the operation, including the arrests and the cutoffs of payments, are part of an effort to preempt fraud instead of relying on what she called the old “pay and chase” model.

“Now, we’re analyzing patterns and trends and claims data, instead of just going claim by claim,” Sebelius said.

Still, court filings allege the defendants were able to carry out their schemes for years.

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In Baton Rouge, seven people who ran two community mental health centers are accused of submitting more than $225 million in false claims for mental health services in a scheme that began in 2005 and continued through October. This case alone is one of the biggest ever Medicare fraud cases.

Government officials say the defendants from Baton Rouge rounded up drug addicts, homeless people and the elderly and used them to submit false claims for treatment.

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In Houston, owners of four private ambulance companies were accused of billing the system for non-existent or unnecessary runs.

In Miami, more than 50 professionals were charged with carrying out a $137 million scam involving mental health services and home health care.

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Other cases involved fraudulent billing for ambulance services, durable medical equipment, psychotherapy and prescription drugs.

Pete Williams, NBC News’ justice correspondent, contributed to this report.  Follow Scott Cohn on Twitter.

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