5 Outrageous Medicare Fraud Examples

October 5, 2023

Medicare fraud is a type of health care fraud that involves the intentional deception or misrepresentation made to obtain reimbursement from the Medicare program, which is the government’s health insurance for elderly people. With hundreds of billions of dollars dedicated to the program, unfortunately, there’s billions of dollars of fraud each year and the fraud is only limited by the creativity of the schemer. Medicare fraud can take many forms, including:

  • Billing for services that were not rendered
  • Billing for services at a higher rate than what is allowed
  • Providing unnecessary services
  • Submitting false or inaccurate information on claims
  • Using a patient’s Medicare number without their permission

Whistleblowers who bring successful False Claims Act cases can receive up to 30% of the government’s recovery. The amount of the whistleblower reward is determined by a number of factors, including the significance of the whistleblower’s information, the amount of money recovered by the government, and the whistleblower’s role in the case.

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There have been a number of large False Claims Act settlements and judgments in recent years, resulting in significant rewards for whistleblowers. In 2012, for example, a whistleblower received a $110 million False Claims Act whistleblower reward for their role in a case that resulted in a $1.3 billion settlement for exposing pharmaceutical fraud. Here are some other examples of outrageous false billing into the Medicare program resulting in False Claims Act settlements and judgments.

  • In 2006 a Dallas doctor frustrated with his lack of steady work and suspension of his medical license, cooked up a scheme and recruited a pool of 11,000 people — many from Dallas’ homeless population — and billed Medicare and Medicaid for unnecessary and undelivered services. By the time he was caught he had billed the two federal programs in excess of $375 million. To recruit his patients, he bribed individuals with cash, food stamps, and groceries. At the time of his arrest, authorities announced that this was the largest example of Medicare fraud ever performed by a single individual, a dubious distinction. 
  • National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More than $6 Billion in Alleged Fraud Losses – Largest Health Care Fraud and Opioid Enforcement Action in Department of Justice History. Opioid addiction led to a pandemic and doctors had a gateway to endlessly bill government programs by keeping an endless stream of addicts.
  • In June of 2015, a new record was set at the time for the largest Medicare fraud ever prosecuted both in terms of number of defendants and number of false billings. During a three-day period that month, law enforcement arrested more than 240 people (including 46 licensed medical professionals and 19 doctors) for allegedly participating in various Medicare fraud schemes totaling more than $710 million. In this case, 44 of the defendants were charged with defrauding Medicare Part D, the prescription drug benefit program. Schemes involved paying cash kickbacks

to patients and then billing for home health care, psychotherapy, physical and occupational therapy, durable medical equipment, and prescription drugs. In addition to violating the False Claims Act, kickbacks implicating federal funds are in violation of the Anti-Kickback Statute. 

  • A Miami-Dade psychiatrist received a 151-month prison sentence and years of supervised release for defrauding the US government. Ironically the overbilling led to over-sentencing or rather a sentence that will exceed his lifetime. He was also ordered to pay $50,697,081 in restitution. The psychiatrist conspired with others to provide false mental health diagnoses in exchange for bribes and kickbacks, while submitting false claims to Medicare and Medicaid. His co-conspirators were previously sentenced for their involvement. The case was investigated by multiple agencies and prosecuted by the United States Attorney’s office.
  • The former President of Riverside General Hospital sentenced to 45 Years. According to federal prosecutors, “The former President of Houston’s Riverside hospital, his son and their co-conspirators saw mentally ill, elderly and disabled Medicare beneficiaries as commodities to be turned into profit centers — not as vulnerable individuals in need of health care.” Along with paying kickbacks to patient recruiters and owners of group homes, the defendants had patients sit around the facility watching movies instead of receiving treatment. They then billed Medicare for more than $158 million for services that were never rendered. After a five-week trial, Earnest Gibson III was sentenced to 45 years. He is appealing that decision.

As one can see from these outrageous examples, Medicare fraud is not only subject to civil enforcement and penalties, but it also has criminal implications. Insiders who are aware of Medicare fraud and fail to blow the whistle may be viewed as a symptom of the problem instead of part of the solution. So in short if you see something, say something, but say it the right way or else you may find yourself in the jackpot of trouble instead of the jackpot of a potential whistleblower award.

Getting in Touch with a Whistleblower Law Firm

If you suspect Medicare fraud, you should act quickly by contacting a Medicare fraud whistleblower law firm that focuses a part of its practice to Medicare/Medicaid fraud cases, a firm like Brown, LLC. Reporting fraudulent activities can help to protect patients and hold those responsible accountable. A skilled law firm with experience handling False Claims Act cases can assist you in reporting the fraud and, if necessary, filing a whistleblower lawsuit to completely invoke and protect your rights.

A whistleblower is entitled to up to 30% of what the government recovers under the False Claims Act, which could be millions of dollars. This award, also known as a qui tam reward, is meant to incentivize people to come forward with information about illegal activities.