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Justice Department sues 35 defendants claiming massive health care fraud

The feds say Medicare was billed $2.1 billion in unnecessary charges

Photo (c) Tinpixels - Getty Images
The U.S. Justice Department has charged 35 defendants with carrying out an alleged Medicare fraud scheme that charged the government $2.1 billion for tests for genetic links to cancer.

The complaint alleges the tests were unnecessary and that the defendants -- including nine doctors -- pushed patients to undergo these tests and then billed the taxpayers.

“These defendants allegedly duped Medicare beneficiaries into signing up for unnecessary genetic tests, costing Medicare billions of dollars,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. “Together with our law enforcement partners, the department will continue to protect the public and prosecute those who steal our taxpayer dollars.”

The wide-ranging investigation covered a number of different states in the South. U.S. Attorney Peter Strasser for the Eastern District of Louisiana said the defendants specifically targeted elderly and disabled patients, enticing them to undergo unnecessary tests that resulted in huge losses for Medicare.

“Schemes such as these have a profound effect on our nation, not only by the monies lost in the scheme but also by stoking public distrust in some medical institutions,” Strasser said. 

Dozens of companies named

The 35 defendants in the action represent dozens of telemedicine companies and cancer genetic testing laboratories. The government claims these companies convinced a large number of Medicare patients that the tests were necessary or would improve their odds of avoiding cancer.

Investigators say the defendants took advantage of the recent popularity of DNA testing to convince patients -- seniors in particular -- that the tests could be beneficial to their long-term health. However, the government charges that, in some cases, the tests were worthless and in others, they weren’t even administered. But Medicare got a bill.

“The defendants are alleged to have capitalized on the fears of elderly Americans in order to induce them to sign up for unnecessary or non-existent cancer screening tests,” said U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida. “The genetic testing fraud schemes put personal greed above the preservation of the American health care system.”

Federal officials say the scope and sophistication of the alleged health care fraud “are nearly unprecedented.” The defendants in the case are based in Florida, Georgia, South Carolina, Texas, and Louisiana.

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