April 9, 2019, 12:19 PM CDT
By Adiel Kaplan, Jay Blackman, Tom Costello and Sarah Ploss
Two
dozen people, including doctors and owners of medical equipment companies, were
charged in a more than $1 billion Medicare scam, authorities said Tuesday.
Investigators
uncovered the sprawling plot that targeted elderly and disabled people by
setting them up with back, neck and knee braces that they didn't need,
according to federal prosecutors.
Called
Operation Brace Yourself, the investigation discovered that medical brace
manufacturers were allegedly paying kickbacks and bribes to doctors working
with fraudulent telemedicine companies in exchange for Medicare patient
referrals for medically unnecessary braces.
The
ill-gotten gains were then laundered through international shell companies and
used to buy exotic cars, yachts and luxury real estate in the United States and
overseas, prosecutors said.
"The
taxpayers should be outraged by this," Gary Cantrell, who oversees fraud
investigations for the Health and Human Services inspector general's office,
said in an interview with NBC News. "These are losses to the Medicare
program that we all, as taxpayers, fund."
As part
of the scheme, doctors were paid to prescribe braces to patients they had
little to no relationship with. Prescriptions frequently came after doctors had
brief conversations via phone or video conference with patients they had never
met, prosecutors said.
The
global fraud involved call centers in the Philippines and throughout Latin
America.
As a
result, the personal information of hundreds of thousands of Medicare
beneficiaries across the country was compromised and could be used in future
schemes, prosecutors said. An even larger number of patients received unwanted
braces sent to their homes. The unwanted products could disqualify them from
receiving a brace under Medicare if they need one in the future, prosecutors
said.
"White-collar
crime is not victimless," Sherri Lydon, U.S. attorney for the district of
South Carolina, where the probe originated, said at a press conference
announcing the indictments. "All taxpayers will endure the rising cost of
health care premiums and out-of-pocket costs as a result of fraud on our
Medicare system."
The
family of Neale Sweetman, who lives in Rochester, N.Y., said he received a box
of unwanted back and knee braces sent by a medical supply company in Florida
and prescribed by a doctor in another state.
"The
order was written by a doctor in North Carolina. My father lives in Rochester,
New York," his daughter Kathi Sweetman told NBC News. "He's never
seen or heard of this doctor."
Medicare
was charged nearly $3,000 for the unneeded medical equipment, the family said.
The Sweetman case was first reported by
NBC affiliate WHEC-TV in Rochester in February.
As many
as 130 medical equipment companies were implicated in the scam that resulted in
a total of $1.2 billion in losses, prosecutors said.
The
sprawling investigation was carried out by the FBI, the IRS, and 17 U.S.
attorney's offices. Charges were brought against defendants in states including
New Jersey, California, Texas and Florida.
"These
defendants — who range from corporate executives to medical professionals —
allegedly participated in an expansive and sophisticated fraud to exploit
telemedicine technology meant for patients otherwise unable to access health
care," Assistant Attorney General Brian Benczkowski of the Justice
Department’s Criminal Division said.
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