The Department of Justice announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes.
The nationwide coordinated law enforcement action includes criminal charges against a telemedicine company executive, owners and executives of clinical laboratories, durable medical equipment companies, marketing organizations, and medical professionals.
Additionally, the Centers for Medicare & Medicaid Services (CMS), Center for Program Integrity (CPI) announced today that it took adverse administrative actions against 52 providers involved in similar schemes. In connection with the enforcement action, the department seized over $8 million in cash, luxury vehicles, and other fraud proceeds.
The coordinated federal investigations primarily targeted alleged schemes involving the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies. Telemedicine schemes account for more than $1 billion of the total alleged intended losses associated with the enforcement action.
These charges include some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme. As alleged in court documents, medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment. For example, cardiovascular genetic testing was not a method of diagnosing whether an individual presently had a cardiac condition and was not approved by Medicare for use as a general screening test for indicating an increased risk of developing cardiovascular conditions in the future.
One particular case charged involved the operator of several clinical laboratories, who was charged in connection with a scheme to pay over $16 million in kickbacks to marketers who, in turn, paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders. As alleged in court documents, orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare – but the results of the testing were not used in treatment of patients. The defendant allegedly laundered the proceeds of the fraudulent scheme through a complex network of bank accounts and entities, including to purchase luxury vehicles, a yacht, and real estate. The indictment seeks forfeiture of over $7 million in United States currency, three properties, the yacht, and a Tesla and other vehicles.
Some of the defendants charged in this enforcement action allegedly controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly and/or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular genetic testing, and other genetic testing and equipment.
The charges allege that the telemedicine companies arranged for medical professionals to order these expensive genetic tests and durable medical equipment regardless of whether the patients needed them, and that they were ordered without any patient interaction or with only a brief telephonic conversation. Often, these test results or durable medical equipment were not provided to the patients or were worthless to their primary care doctors.
This announcement builds on prior telemedicine enforcement actions involving over $8 billion in fraud, including 2019’s Operation Brace Yourself, 2019’s Operation Double Helix, 2020’s Operation Rubber Stamp, and the telemedicine component of the 2021 National Health Care Fraud Enforcement Action. Specifically, the Operation Brace Yourself Telemedicine and Durable Medical Equipment Takedown alone resulted in an estimated cost avoidance of more than $1.9 billion in the amount paid by Medicare for orthotic braces in the 20 months following that enforcement action.
Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 16 strike forces operating in 27 districts, has charged more than 5,000 defendants who collectively billed federal health care programs and private insurers approximately $24.7 billion.