Feds Target Home Health in Historic, $900 Million Fraud Bust

The Medicare Fraud Strike Force has engaged in a three-day execution of the largest fraudulent billings takedown—that includes home health agencies—in the group’s history. Approximately 300 people were charged across 36 federal districts for their alleged participation in a variety of schemes that involved more than $900 million in fraudulent health care billings, according to Attorney General Loretta Lynch.

The 301 defendants—including doctors, nurses and other licensed medical professionals—were charged with a variety of crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. Health care services and providers involved in the various schemes included home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DMA) and prescription drugs.

“They submitted dishonest claims, charged excessive fees and prescribed unnecessary drugs,” Lynch said at a press conference on Wednesday. The Medicare Fraud Strike Force is a joint effort between the Department of Justice (DOJ) and the Department of Health and Human Services (HHS).


A number of the individuals arrested in the takedown owned, operated or worked within home health and allegedly participated in schemes that resulted in millions of dollars in fraudulent and false billings paid out from Medicare, according to the Department of Justice (DOJ). Many of these schemes took place in Florida, Illinois and Texas—three states that have been tagged for their high rates of home health Medicare fraud. Florida, Texas and Illinois will be a part of the upcoming Pre-Claim Review Demonstration for Home Health Services pilot by the Centers for Medicare & Medicaid Services (CMS) in an effort to combat fraudulent billings to the federal agency.

A total of 100 defendants were charged in the Southern District of Florida alone for participating in various schemes related to approximately $220 million in false billings across home health care, mental health services and pharmacy fraud. Within this group, nine people were charged with operating six different home health care companies in the Miami area where they submitted false and fraudulent claims to Medicare for services that were not medically necessary and were based on bribes and kickbacks. The six companies received more than $24 million from Medicare in the scheme, the DOJ reported.

Twenty-four individuals were charged in the Southern District of Texas for their parts in cases involving more than $146 million in alleged fraud.


“One of these defendants is a physician with the highest number of referrals for home health services in the Southern District of Texas,” according to the DOJ. “This physician has been charged with participating in separate schemes to bill Medicare for medically unnecessary home health services that were often not provided. Numerous companies that submitted claims to Medicare using the fraudulent home health referrals from the physician were paid over $38 million by Medicare.”

In the Northern District of Illinois, six people were charged in relation to three different schemes involving bribery and false and fraudulent claims for home health services and disability benefits. The schemes were allegedly run by a medical doctor and individuals who owned or co-owned fraudulent providers, and resulted in more than $12 million paid out to the defendants and their companies.

Three defendants were also charged in the Eastern District of Louisiana in connection with a health care fraud and wire fraud conspiracy involving defunct a home health care provider. Allegedly, the scheme relied on kickbacks through patient recruiters, who exchanged payment for patients who oftentimes never received nor qualified for home health care as billed, according to the DOJ. Patient records were “routinely fabricated and altered” in claims made to Medicare.

As the case was the largest takedown the strike force has ever conducted, Lynch underscored that the Justice Department will continue to crack down on fraud—an action expressly undertaken as part of President Obama’s efforts to save money within the Affordable Care Act (ACA).

“As this takedown should make clear, health care fraud is not an abstract violation or benign offense—It is a serious crime,” Lynch said in a statement. “The wrongdoers that we pursue in these operations seek to use public funds for private enrichment. They target real people—many of them in need of significant medical care. They promise effective cures and therapies, but they provide none. Above all, they abuse basic bonds of trust—between doctor and patient; between pharmacist and doctor; between taxpayer and government—and pervert them to their own ends.”

In connection with the Strike Force’s takedown, the large-scale enforcement also included 26 cases from the U.S. Attorney’s Offices.

Of these cases, two defendants from the Southern District of Ohio were charged for their roles in a $7.5 million home health care fraud scheme.

The cases announced are being prosecuted and investigated by U.S. Attorney’s Offices across the nation, the Medicare Fraud Strike Force teams from numerous states and the Justice Department’s Criminal Division, agents from the Federal Bureau of Investigation, the Department of Health and Human Services and the Office of the Inspector General, the Drug Enforcement Administration, DCIS and state Medicaid Fraud Control Units.

The takedown represents the Medicare Fraud Strike Force’s ongoing efforts to combat Medicare—and specifically home health—fraud.

“Millions of seniors depend on Medicare for essential health coverage, and our action shows that this administration remains committed to cracking down on individuals who try to defraud the program,” Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell said in a statement. “We are continuing to put new tools and additional resources to work, including $350 million from the Affordable Care Act (ACA), for health care fraud prevention and enforcement efforts.”

Written by Amy Baxter

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