Feds charge 24 in $1.2B telemedicine fraud scheme

Top executives from telemedicine companies and the owners of durable medical equipment companies were among 24 defendants charged for their alleged participation in a healthcare fraud scheme that resulted in more than $1.2 billion in losses, according to the Department of Justice.

According to federal prosecutors, the complex scheme began with telemarketers calling Medicare beneficiaries and getting them to accept free or low-cost DME braces, regardless of medical necessity. The call centers would transfer Medicare beneficiaries to telemedicine companies for consultations with physicians, who allegedly prescribed the orthopedic braces to patients who they had never met. The call centers would sell the prescriptions to DME companies, which shipped the braces to beneficiaries, billed Medicare and paid kickbacks to physicians.

"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 healthcare," Assistant Attorney General Brian A. Benczkowski said in a press release. "I commend the Criminal Division prosecutors and our partners from U.S. Attorney's Offices and law enforcement agencies across the country for their unrelenting efforts to stop this alleged fraud before more money was stolen from American taxpayers."

In addition to the criminal charges announced April 9, CMS said it is taking action against 130 DME companies that submitted $1.7 billion in claims, of which more than $900 million was paid out.

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