This week, the federal government raided dozens of locations belonging to doctors and medical equipment companies who were suspected of taking part in a massive telemarketing scam that targeted Medicare recipients and cost taxpayers nearly $1 billion. In all, 24 people were charged and that included three licensed medical professionals as well as company CEOs.

The scam used telemarketers from the Philippines and Latin America who sought out elderly patients eligible for Medicare by using TV and radio ads, as well as cold calls, promising a free or low-cost brace for their back, shoulder, wrist or knee.

“Once the scammer obtained a person’s insurance information, the companies would bill Medicare and mail the patients unnecessary orthotic braces — sometimes four or five — giving kickbacks to the doctors who wrote prescriptions over the phone.

Federal officials said the scam was one of the largest health care fraud schemes ever investigated, involving more than 80 search warrants in 17 federal districts. The people being charged reside all across the country, including in Florida, New Jersey, Texas, North Carolina, South Carolina, California and New York.

Officials said the illegal profits were laundered through international shell companies to buy exotic cars, yachts and luxury real estate worldwide.”1

Officials say these types of scams are not uncommon. However, this one was “particularly alarming” because of the fact that it involved people all over this country and abroad, including licensed medical professionals who wrote bogus scripts.

“After verifying their Medicare status, officials said the marketers directed the patient to a remote telemedicine firm for a doctor’s consultation.

Without setting eyes on the patient or reviewing the patient’s medical history to determine if the brace was medically necessary, the doctor would submit a prescription to the call center and Medicare would be billed, federal officials said.

The call center would receive a kickback of $289 per brace and the medical equipment company would get to keep the rest of the reimbursement, officials said. Some 130 durable medical equipment companies were accused of submitting over $1.7 billion in claims, resulting in the $900 million payouts, according to investigators.”1

Gary Cantrell, deputy inspector general for investigations of the Department of Health and Human Services Office of the Inspector General said the government was tipped off via data analytics, insiders who cooperated with investigators, and patients who smelled a rat; between January and March of 2019, “a government hotline received nearly 1,800 complaints that investigators believe might be connected to the fraudulent sale of durable medicare equipment.”1



  1. ABC News