Then the call would be sent to a telemedicine company for a doctor consult after Medicare coverage was verified. The doctors then would write a prescription for a brace, or several braces, whether one was needed or not. The call centers would collect the prescriptions and send to a medical equipment company which would send the brace to the victims. The "free" brace would then be billed to Medicare with it paying $500 to $900 per brace to the equipment company, and the company then would kick back $300 per brace, according to CBS News. The money then went to buy expensive cars, yachts and luxury homes, the AP reported. The investigation started last year after the Medicare fraud hotline started getting calls from upset beneficiaries. The defendants were across the country, located in California, Florida, New Jersey, Pennsylvania, South Carolina and Texas. Federal officials said it was one of the biggest fraud rings they've seen, according to the AP.<doc-sep>Action is being taken following a Troubleshooter I-Team investigation into medical braces being sent to seniors that they say they didn't want or order, yet Medicare paid for the braces.On Tuesday, the federal government took action against several telemedicine companies, dozens of durable medical equipment companies, along with doctors and company executives that the feds say were part of one of the largest health care fraud schemes that cost taxpayers nearly $1 billion. We first told you about this scam in October. Several seniors reported to us that they continued to get medical braces in the mail that their doctors didn't prescribe for them.Medicare did pay for these braces, despite these seniors telling us they did not order the braces and didn't want them. We tracked down that these braces were prescribed by several telemedicine doctors and companies.In one case, Raleigh resident Emmett McGhee was sent two knee and two back braces. "I didn't order nothing," he said.When Emmett got the paperwork on who prescribed the braces it was a nurse practitioner in Belmont, NC. According to the paperwork, Heintz justified the prescription in her examine notes. It states McGhee complained of back and knee pain and wanted to use an orthotic brace. It went on to say McGhee said it was 10/10 for knee and back pain.The notes said Emmett was a female who was 65 inches tall and weighed 120 pounds. "As the result of my examination of Ms. McGhee relative to her back pain complaint, I'm ordering the following back brace," the prescription said.Remember Emmett is a male, not a female as Heintz's examine notes stated. "I don't know, looks to me like it's just an intentional rip-off is what it looks like," Emmett said. At the time of our investigation, Medicare told us they were investigating.On Tuesday, investigators said 24 people were charged in the fraud, including Doctor Randy Swackhammer of Goldsboro. He's charged for an alleged $5 million conspiracy to commit health care fraud that involved writing medically unnecessary orders for DME while working for a telemedicine company, in many instances with only a brief telephonic conversation with the patients.Often how this scam starts is with a phone call that claims you might qualify for medical grade braces. Investigators say the scam relied on telemarketers who called senior citizens who had Medicare and promised a free or low-cost brace. If the caller got a person's insurance information, the companies would bill Medicare and mail the patients unnecessary orthotic braces, and then investigators say give kickbacks to the doctors who wrote prescriptions over the phone. "Unscrupulous doctors, unscrupulous durable medical equipment company owners, these marketing firms, their only interest is in the paycheck -- is in that taxpayer dollar that's being stolen," said Gary Cantrell, deputy inspector general for investigations of the Department of Health and Human Services Office of the Inspector General.<doc-sep>Federal agents on Tuesday broke up a billion dollar Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors. Two dozen people - including several in New Jersey - were charged. The Justice Department said the scheme relied on overseas call centers to pry Medicare numbers from beneficiaries. Authorities also announced charges against owners of call centers, telemedicine firms and medical equipment companies that shipped unneeded back, shoulder, wrist and knee braces. Profits from the scheme were laundered through offshore shell companies and then used to buy high-end cars, yachts and luxury homes here and abroad, officials said. Medicare's anti-fraud unit said it's taking action against 130 medical equipment companies implicated. The companies billed the program a total of $1.7 billion, but not all of it was paid out. The loss to Medicare was estimated at more than $1.2 billion. The Health and Human Services inspector general's office said the fast-moving scam was fueled by kickbacks among the parties involved. The FBI, the IRS, and 17 U.S. attorney's offices took part in the crackdown. "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." Officials said the scam was detected last summer as complaints from beneficiaries poured in to the Medicare fraud hotline. They said telemarketers would reach out to seniors offering "free" orthopedic braces, also touted through television and radio ads. Interested beneficiaries would be patched through to call centers, part of what officials described as an "international telemarketing network" with operations in the Philippines and throughout Latin America. After verifying Medicare coverage, the seniors would be transferred to telemedicine companies for consultations with doctors, who wrote prescriptions for orthopedic braces, regardless of whether the patients needed them or not. Sometimes the same patient would get several braces. The call centers 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 $500 to $900 per brace from Medicare and would pay kickbacks of nearly $300 per brace. Officials said it's 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. Cantrell said federal agents had gained cooperation from people familiar with the various schemes. The U.S. Attorney’s Office in New Jersey said seven defendants were charged by federal prosecutors in the state. “The indictments we are unsealing today charge the defendants with running a complex, multilayered scheme to defraud our Medicare system and avoid detection by government regulators,” said New Jersey U.S. Attorney Craig Carpenito. “The defendants took advantage of unwitting patients who were simply trying to get relief from their health concerns. Instead, the defendants preyed upon their weakened state and pushed millions of dollars’ worth of unnecessary medical devices, which Medicare paid for, and then set up an elaborate system for laundering their ill-gotten proceeds. We are proud to join our law enforcement partners in New Jersey and around the country to put a stop to this unscrupulous criminal activity.” Those charged in New Jersey’s federal judicial district include Creaghan Harry, 51, of Highland Beach, Florida, Lester Stockett, 51, of Deefield Beach, Florida and Elliot Loewenstern, 56, of Boca Raton, Florida, identified by authorities as the the owner, chief executive officer and vice president of marketing, respectively, of “purported call centers and telemedicine companies.” The charges stem from “their alleged participation in a $454 million illegal health care kickback and international money laundering scheme related to the solicitation of illegal kickbacks and bribes in exchange for the referral of durable medical equipment (DME) companies orders to DME providers.” In a statement, the U.S. Attorney’s Office said Dr. Joseph DeCoroso, 62, of Toms River, was also charged in an alleged $13 million conspiracy to commit health care fraud and separate charges of health care fraud for “writing medically unnecessary orders for DME, in many instances without ever speaking to the patients, while working for two telemedicine companies." Federal charges were also filed in New Jersey against Neal Williamsky 59, of Marlboro, and Nadia Levit, 39, of Englishtown, owners of approximately 25 DME companies for their alleged roles in a $150 million scheme linked to “the payment of kickbacks and bribes in exchange for medically unnecessary DME orders,” according to federal authorities. “The breadth of this nationwide conspiracy should be frightening to all who rely on some form of health care,” IRS criminal investigations chief Don Fort said in a statement. “The conspiracy ... details broad corruption, massive amounts of greed and systemic flaws in our health care system that were exploited by the defendants.” Attempts to reach defendants named by the Justice Department were unsuccessful. In several cases telephone numbers associated with the individuals were disconnected. Others did not respond to messages. The investigation is continuing. Authorities asked doctors who have been involved with telemedicine and medical equipment fraud to voluntarily come forward. Health care fraud is a pervasive problem that costs taxpayers tens of billions of dollars a year. The true extent of it is unknown, and some cases involve gray areas of complex payment policies. Experts say part of the problem is that Medicare is required to pay medical bills promptly, which means money often goes out before potential frauds get flagged. Investigators call that "pay and chase." In recent years, Medicare has tried to adapt techniques used by credit card companies to head off fraud. Law enforcement coordination has grown, with strike forces of federal prosecutors and agents, along with state counterparts, specializing in health care investigations. Officials said the government has options to recoup at least some of the money lost to Medicare, including seizing fraudsters' assets and accounts, as well as property purchased with the proceeds of the scam. The Medicare beneficiaries drawn into the orthopedic braces scam didn't have to pay anything up front, but Cantrell said they have been harmed as well: A beneficiary's private information, once in the hands of fraudsters, can be resold for many illegal purposes. Additionally, if a beneficiary whose information was misused ever does need an orthopedic brace, he or she may encounter waiting periods from Medicare. The program limits how often it pays for certain supplies and equipment. “It can be very attractive to receive equipment,” Cantrell said. “But after giving out your identifying information, it could be compromised to perpetuate additional fraud. There is no fraud without the ID number of a Medicare beneficiary.” NJ Advance Media contributed to this report<doc-sep>
Two dozen people, including doctors and owners of medical equipment companies, were charged in a more than $1 billion Medicare scam, authorities said Tuesday. Investigators uncovered the sprawling plot that targeted elderly and disabled people by setting them up with back, neck and knee braces that they didn't need, according to federal prosecutors. Called Operation Brace Yourself, the investigation discovered that medical brace manufacturers were allegedly paying kickbacks and bribes to doctors working with fraudulent telemedicine companies in exchange for Medicare patient referrals for medically unnecessary braces. The ill-gotten gains were then laundered through international shell companies and used to buy exotic cars, yachts and luxury real estate in the United States and overseas, prosecutors said. "The taxpayers should be outraged by this," Gary Cantrell, who oversees fraud investigations for the Health and Human Services inspector general's office, said in an interview with NBC News. "These are losses to the Medicare program that we all, as taxpayers, fund." United States Attorney Sherri A. Lydon NBC News As part of the scheme, doctors were paid to prescribe braces to patients they had little to no relationship with. Prescriptions frequently came after doctors had brief conversations via phone or video conference with patients they had never met, prosecutors said. The global fraud involved call centers in the Philippines and throughout Latin America. As a result, the personal information of hundreds of thousands of Medicare beneficiaries across the country was compromised and could be used in future schemes, prosecutors said. An even larger number of patients received unwanted braces sent to their homes. The unwanted products could disqualify them from receiving a brace under Medicare if they need one in the future, prosecutors said. "White-collar crime is not victimless," Sherri Lydon, U.S. attorney for the district of South Carolina, where the probe originated, said at a press conference announcing the indictments. "All taxpayers will endure the rising cost of health care premiums and out-of-pocket costs as a result of fraud on our Medicare system." The family of Neale Sweetman, who lives in Rochester, N.Y., said he received a box of unwanted back and knee braces sent by a medical supply company in Florida and prescribed by a doctor in another state. "The order was written by a doctor in North Carolina. My father lives in Rochester, New York," his daughter Kathi Sweetman told NBC News. "He's never seen or heard of this doctor." Medicare was charged nearly $3,000 for the unneeded medical equipment, the family said. The Sweetman case was first reported by NBC affiliate WHEC-TV in Rochester in February. As many as 130 medical equipment companies were implicated in the scam that resulted in a total of $1.2 billion in losses, prosecutors said. The sprawling investigation was carried out by the FBI, the IRS, and 17 U.S. attorney's offices. Charges were brought against defendants in states including New Jersey, California, Texas and Florida. "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 health care," Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division said.