Feds Bust $1.2 Billion Medicare Orthopedic Brace Scam

The United States Department of Justice has announced that it has broken up a $1.2 billion Medicare scam that sold unneeded orthopedic braces to seniors around the country.

The scam worked through a network of telemarketers who would reach out to senior citizens and offer “free” orthopedic braces. If someone expressed interest, they would be passed on to call center that would verify that the senior had Medicare coverage and then send them to a telemedicine company for a phone consultation with a doctor.

At these telemedicine companies, doctors would write prescriptions for orthopedic braces, whether the patients needed them or not. Gary Cantrell, who oversees fraud investigations for the U.S. Department of Health of Human Services Office of Inspector General said, “The telemedicine we are talking about is basically a tele-scam…We are not talking about the use of advanced technology to provide better access to care.”

Once the prescriptions were written, the call centers sold them to medical equipment companies. The medical equipment companies would ship the braces to the patients and bill Medicare. Medicare would pay between $500 and $900 per brace and the medical equipment companies would pay the call centers kickback of almost $300 per brace.

This one was one of the largest health care fraud schemes investigated by the FBI and the U.S. Department of Health of Human Services Office of the Inspector General.

The investigation resulted in charges against 24 people across the United States. The people who were charged included doctors who have been accused of writing bogus prescriptions, owners of call centers, telemedicine firms, and medical equipment companies.

Medicare’s anti-fraud unit has also said that it is acting against the 130 medical equipment companies that were involved in the scam. These companies submitted over $1.7 billion in claims and were paid over $900 million.