Feds break up US$1.2b Medicare orthopaedic brace scam

FEDERAL AUTHORITIES said Tuesday that they have broken up a US$1.2-billion Medicare scam that peddled unneeded orthopaedic braces to hundreds of thousands of seniors via foreign call centres.

The US Justice Department announced charges against 24 people across the country, including doctors accused of writing bogus prescriptions for unneeded back, shoulder, wrist and knee braces. Others charged included owners of call centres, telemedicine firms and medical equipment companies.

The US Health and Human Services (HHS) inspector general’s office said the fast-moving scam morphed into multiple related schemes, fuelled by kickbacks among the parties involved. The Federal Bureau of Investigation, the Internal Revenue Service, and 17 US attorney’s offices took part in the crackdown. Arrests were made Tuesday morning.

Medicare’s anti-fraud unit said it’s taking action against 130 medical equipment companies implicated. They billed the programme a total of US$1.7 billion, of which more than US$900 million was paid out.

Telemarketers would reach out to seniors offering “free” orthopaedic braces, also touted through television and radio ads. Beneficiaries who expressed interest would be patched through to call centres involved in the scheme. Officials described an “international telemarketing network” with call centres in the Philippines and throughout Latin America.

The call centres would verify seniors’ Medicare coverage and transfer them to telemedicine companies for consultations with doctors.

“The telemedicine we are talking about is basically a tele-scam,” said Gary Cantrell, who oversees fraud investigations for the HHS inspector general’s office. “We are not talking about the use of advanced technology to provide better access to care.”

The doctors would write prescriptions for orthopaedic braces, regardless of whether the patients needed them. In some cases, several braces were prescribed for the same patient.

The call centres would collect prescriptions and sell them to medical equipment companies, which would ship the braces to beneficiaries and bill Medicare. Medical equipment companies would get US$500 to US$900 per brace from Medicare and would pay kickbacks of nearly US$300 per brace.

The scam was detected last summer, officials said. Complaints from beneficiaries were pouring in to the Medicare fraud hotline, and some consumer news organisations warned seniors. As the investigation progressed, Cantrell said, federal agents gained cooperation from people familiar with the various schemes.

Officials said it is one of the biggest frauds the inspector general’s office has seen. Charges were being brought against defendants in California, Florida, New Jersey, Pennsylvania, South Carolina and Texas.