Anti-Fraud Operations Total $1.4 Billion in Claims

COLUMBIA, S.C. (October 9, 2020)—In what is the third in a nationwide series of telemedicine fraud prosecutions, more than 40 people in South Carolina and Georgia are being charged. The charges add up to hundreds of millions in fraudulent billings.

The District of South Carolina and the Southern District of Georgia have been on the vanguard of combating health care fraud across the country and globe. Playing instrumental roles in three nationwide operations, Operation Brace Yourself, Double Helix, and now Rubber Stamp, the districts have obtained convictions of the owners of international telemarketing firms; owners of genetic testing centers; owners of pharmacies; owners of medical supply businesses; CEOs of marketing companies; compliance officers; doctors; and nurses. Working cooperatively with other federal districts and the Department of Justice’s Health Care Fraud Strike Force, cases have been brought in over 20 districts across the country, resulting in over 175 individuals being charged and or convicted, with over a billion dollars in restitution. Additionally, the Centers for Medicare & Medicaid Services/Center for Program Integrity separately took the largest number of adverse administrative actions resulting from a single administrative health care fraud investigative initiative in history in revoking the Medicare billing privileges of over 250 additional medical professionals for their involvement in telemedicine schemes.

In the District of South Carolina, in the last week five individuals were charged in a telemedicine-based health care fraud and kickback conspiracy, involving more than $100 million dollars in fraudulent billings in South Carolina. The individuals were all medical providers—four doctors and one nurse—who signed prescriptions over a web-based platform, often times without meeting or speaking with the patients. Additionally, charges were filed against eight individuals and one corporation related to a health care fraud and kick back conspiracy that used offshore call centers and fraudulent telemedicine to bill hundreds of millions of dollars for durable medical equipment that was not medically necessary. These charges are in addition to the dozens of individuals previously charged.

In the Southern District of Georgia, four individuals were charged in the last week for telemedicine-based fraud and kickback schemes, adding to the 26 defendants charged previously. The four new defendants, three of whom were medical professionals, were alleged to have participated in this telemedicine-based scheme, which now collectively totals in excess of $1.4 billion in fraudulent claims for defendants charged in the Southern District of Georgia alone. Among the recent defendants charged, a former compliance officer was charged with conspiracy to commit health care fraud for her role as part of a company that connected various parties through an online-based platform where patients’ health information would be uploaded, prescriptions would be signed electronically by medical professionals, and the package of health information with a signed prescription could then be sold to durable medical equipment companies for eventual billing to Medicare and other programs.

“Those who steal from federal health care programs are taking money from the pockets of taxpayers. This is reprehensible,” said Peter M. McCoy, Jr., U.S. Attorney for the District of South Carolina. “Along with our federal law enforcement partners and our colleagues in the Southern District of Georgia, we have worked tirelessly to identify and prosecute those who seek to harm the citizens of South Carolina and Georgia. We have also ensured that millions of dollars have been returned, or will be returned, to these essential health care programs.”

“This coordinated, deliberate and methodical series of investigations and prosecutions in the Southern District represents an ongoing, exhaustive team effort with our law enforcement partners to protect the taxpayers’ safety net programs from fraud and theft,” said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. “The warning should now be abundantly clear: Unscrupulous providers will find themselves in hot water if they attempt to illegally enrich themselves from these programs.”

“Thousands of Americans have had their health jeopardized and personal information bartered, while these illegal enterprises have reaped our tax dollars,” said Jody Norris, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Columbia, South Carolina. “The FBI, working with our federal partners, have stopped these criminal networks and we will remain dedicated to seeking out and dismantling others.”

“Telemedicine has become a valuable tool for delivering health services in this time of pandemic. However, bad actors are abusing these tools to commit health care fraud,” said Derrick L. Jackson, Special Agent in Charge of the Atlanta region for the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS). “When marketing and so-called telehealth services are misused, alleged violators can expect aggressive investigation and swift prosecution.”

At its core, the federal filings allege that this criminal network targeted by these investigations involves individuals and companies that collect patient data and sell it to one or more durable medical equipment (DME) suppliers, pharmacies or labs. Patients were often lured into the scheme by an international telemarketing network. According to the filings, the co-conspirators’ promise of often inappropriate durable medical equipment, test results and medication misled patients and delayed their chance to seek appropriate treatment for medical complaints. As part of these schemes, telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. The filings allege that durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers. 

The cases were investigated by agents from the FBI, HHS OIG, and Secret Service; specifically, Special Agents Neil Power, Su Kim, Ryan Schubert, Randy Dye, T.J. Smith, Dave Graupner, Karen Corbett, and Matt Britsch. The cases were prosecuted by Assistant U.S. Attorneys Jim May, Derek A. Shoemake, and Will Lewis with the District of South Carolina; Assistant U.S. Attorneys Tom Clarkson and Jonathan Porter with the Southern District of Georgia; and Assistant Chief Jacob Foster and Trial Attorney Catherine Wagner with the Department of Justice’s Health Care Fraud Strike Force.

The charges in these cases are only accusations of a crime, and defendants are presumed innocent unless and until proven guilty.

Find more information on the previous operations here and here. And from HomeCare: Things to Watch in DME Fraud Enforcement