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Lawmakers Join All-Out Push to Combat Medicare Fraud


Bryan Gulley (Aging), (202) 224-7752
Ryan Brown (Nelson), (202) 224-1679
Jen Burita (Collins), (202) 224-9229
Jennie Westbrook (Carper), (202) 224-2627
Jill Gerber (Grassley), (202) 224-6522


WASHINGTON, DC  - As law enforcement announced a nationwide sting against Medicare fraudsters today, a bipartisan group of lawmakers in Washington was putting the finishing touches on legislation aimed at making a significant dent in the problem. 

Federal law enforcement officials in Miami today announced the details of a multi-agency strike force operation that resulted in the arrest of 90 people nationwide for defrauding Medicare out of some $260 million.

U.S. Senate Special Committee on Aging Chairman Bill Nelson (D-FL) and Ranking Member Susan Collins (R-ME), who have spent a great deal of time examining the problem of Medicare fraud and ways to curtail it, commended the actions announced today by federal officials while also saying that the crackdown illustrates the need to do more to stop Medicare fraud.

Nelson and Collins, along with Sens. Tom Carper (D-DE) and Chuck Grassley (R-IA), have authored legislation to strengthen the government’s hand in stopping Medicare fraud.  The lawmakers plan to formally file the legislation on Thursday.

“This is exactly why we’re doing the legislation,” said U.S. Sen. Bill Nelson (D-FL) who chairs the Senate Special Committee on Aging.  “We’ve got to get the problem under control.” 

Senator Collins added, “For decades, the GAO has identified Medicare as being at high risk for improper payments.  This is unacceptable.  The loss of these funds not only compromises the financial integrity of the Medicare program, but it also undermines our ability to provide needed health care services to the more than 54 million older and disabled American workers who depend on this vial program. Our legislation emphasizes a strategy to prevent fraud from happening in the first place.” 

“Medicare provides lifesaving care to some of our nation’s most vulnerable citizens,” said Sen. Carper. “Unfortunately, too many unscrupulous individuals take advantage of this vital program and end up costing taxpayers millions and shortchanging beneficiaries. It is critical that we do all that we can to curb fraud while protecting beneficiaries and ensuring effective care. This legislation is an important step in combating Medicare fraud and preserving this essential program for the future generations. I commend Sens. Nelson and Collins for their leadership in this effort.” 

“Our bill will build on the Physician Payments Sunshine Act that I co-authored,” Grassley said.  “It requires HHS to use available data, including data from the Sunshine Act, to verify doctors’ reported information about ownership interests in organizations that bill Medicare.  This will help flush out any doctors who commit fraud from their own facilities.”

Specifically, the legislation will require Medicare to verify that those wishing to enroll in the program have not owned a company that previously defrauded the government.  Currently, Medicare relies on self-reported information.  As a consequence, a provider who previously had an ownership interest in an organization that defrauded Medicare could potentially get back into the program by using a different name and failing to disclose their interest in the previous organization.

The bill will also allow private insurers to share information about potentially fraudulent providers with Medicare, and requires new medical coding systems to be tested before they’re deployed to ensure Medicare’s fraud prevention systems work properly.  Additionally, the Medicare Payment Advisory Commission will be allowed to make recommendations regarding fraud prevention and Medicare will be required to develop a strategy to reliably estimate just how many taxpayer dollars are lost each year to fraud.

According to a recent estimate, fraud in the country’s Medicare system takes some $60 billion to $90 billion annually out of the system and puts it into the pockets of crooks.

The lawmakers’ legislation already has the support of the National Health Care Anti-Fraud Association, the Coalition Against Insurance Fraud, the National Insurance Crime Bureau, America’s Health Insurance Plans, Humana and the Blue Cross Blue Shield Association.

Below is a summary of the bill and the Justice Department’s release on today’s arrests:

Stop SCAMS ACT OF 2014

Sponsors: Sens. Bill Nelson, Susan Collins, Tom Carper, Bob Casey, Chuck Grassley


The Medicare program is particularly vulnerable to fraud as it goes through significant changes and implements a variety of new policies.  Among these is the future adoption of new code sets; new provider enrollment procedures; limited resources; and the ever-increasing sophistication of Medicare fraud schemes.  The Medicare program needs to carefully test new systems to assess their impact on detection and prevention of fraud prior to deployment.  It needs to be able to better identify and keep out of the program those who have a known history of defrauding the government.  And finally, it needs to know how much fraud is in the system, and what its greatest vulnerabilities are, to target resources effectively.


  • In FY 2012, the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of health care fraud-related crimes during the year. 
  • According to one estimate, Medicare fraud is estimated to cost taxpayers $60 billion to $90 billion each year.

Stop SCAMS ACT OF 2014

The Stop SCAMS Act of 2014 helps safeguard taxpayer dollars and reduce fraudulent payments by:


Allow private insurers to share information about potentially fraudulent providers with Medicare and each other to prevent health care fraud.


Under Medicare currently, providers who previously had an ownership interest in an organization that defrauded the Medicare program could potentially get back into the program by using a different name and failing to disclose their interest in the previous organization -- how the Wolf of Wall Street’s business partner allegedly defrauded Medicare after failing to disclose his ownership interest in the company.   The bill would require Medicare to verify provider ownership interests using other databases, including information obtained under the Physician Payments Sunshine Act. 


Require full end-to-end testing of code sets before implementation of the new codes, to ensure that payments to providers are not delayed and fraud prevention systems continue to work appropriately.  Before HHS could implement any new coding system, it would be required to certify to Congress that all testing had been completed, and plans were put in place to remediate any impact on the timely payment of legitimate claims. 


Allow the Medicare Payment Advisory Commission to make recommendations regarding fraud prevention, and require the Medicare program to develop a strategy for reliably estimating the amount of taxpayer dollars lost each year to fraud.


National Health Care Anti-Fraud Association, Coalition Against Insurance Fraud, the National Insurance Crime Bureau, America’s Health Insurance Plans, Humana and the Blue Cross Blue Shield Association.


Department of Justice

Office of Public Affairs


Tuesday, May 13, 2014

Medicare Fraud Strike Force Charges 90 Individuals for Approximately $260 Million in False Billing

27 Medical Professionals, Including 16 Doctors, Charged with Health Care Fraud

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.

This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history.   The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.  In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing.   Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.

“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder.   “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs.  Department of Justice will not tolerate these activities.  And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius.  “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.  Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price.  We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering.   The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided.  In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.

“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil.  “Among the defendants charged were 27 medical professionals, including 16 doctors.   The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients.  The fraud was rampant, it was brazen, and it permeated every part of the Medicare system.  But law enforcement continues to strike back.  Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars.  Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud.  We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell.  “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need.  The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels.  But we need the public’s help.  Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers.  We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“ Today's arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson.  “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”

“ Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal.  “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”

In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud.   In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme.   Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed.   The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.

Eleven individuals were charged by the Houston Medicare Strike Force.   Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services.   According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.

Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million.   In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.

In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy.   In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided.  Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare.   He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.

In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred .  In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away.  The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.

In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint.   Dr. Ahmed has charged with health care fraud and making false statements.   In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.

To learn more about HEAT, go to: .

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