Feds announce enforcement against $1.2 billion in health care fraud across nation

Medical fraud estimated at more than $1.2 billion led to criminal charges against 36 defendants across the country this week, federal investigators said.

Telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) all were part of schemes announced this week by the U.S. Department of Justice (DOJ). Meanwhile, the Centers for Medicare & Medicaid Services’ (CMS) Center for Program Integrity (CPI) announced adverse administrative actions against 52 providers involved in similar schemes, seizing $8 million in cash, luxury vehicles, and other fraud proceeds, according to DOJ.

“The Department of Justice is committed to prosecuting people who abuse our health care system and exploit telemedicine technologies in fraud and bribery schemes,” Assistant Attorney General Kenneth A. Polite Jr., of the Justice Department’s Criminal Division, said in a news release. “This enforcement action demonstrates that the department will do everything in its power to protect the health care systems our communities rely on from people looking to defraud them for their own personal gain.”

The announcement came just weeks after DOJ and the U.S. Department of Health and Human Services announced federal investigators won or negotiated more than $5 billion in health care fraud judgments and settlements – a record amount – in the year ended Sept. 30, 2021. The figure was part of the annual report of the federal Health Care Fraud and Abuse Control Program.

Targeting telehealth

The newly announced, coordinated investigations primarily targeted laboratory owners and operators paying illegal kickbacks and bribes for medical professionals to refer patients through bogus telemedicine and digital medical technology companies. Telemedicine schemes accounted for more than $1 billion of the total intended losses in the latest enforcement actions, according to DOJ.

The charges include some of the nation’s first prosecutions related to fraudulent cardiovascular genetic testing, a burgeoning scheme, according to DOJ.

“As alleged in court documents, medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment,” the federal news release said. “For example, cardiovascular genetic testing was not a method of diagnosing whether an individual presently had a cardiac condition and was not approved by Medicare for use as a general screening test for indicating an increased risk of developing cardiovascular conditions in the future.”

Diagnosing for dollars

Among the largest dollar amounts contained in the allegations, according to DOJ:

• Jamie McNamara, 47, of Lee’s Summit, Missouri, was indicted for allegedly bilking Medicare of more than $174 million by billing for cancer and cardiovascular genetic testing that was medically unnecessary and tainted by kickbacks, and for laundering the proceeds. McNamara operated a series of laboratories in Louisiana and Texas, including Clarity Diagnostic Laboratories LLC, Mercury Laboratory Services, Opteo Laboratory LLC, and Signify Laboratory LLC, and paid marketers for referrals of tests that were not prescribed by the beneficiary’s treating physician and were not used in treatment. The DOJ’s online documents included a map showing the Louisiana scheme apparently connected to all the other 49 states. Federal agents seized more than $7 million in bank accounts and several luxury vehicles.
• Emylee Thai, 37, of Santa Ana, California, a laboratory owner, was indicted for allegedly billing Medicare for $142 million, and receiving about $95 million, for genetic testing not medically necessary and often not used in a beneficiary’s medical treatment, starting in 2019.
• Luis Lacerda, 35, of Fort Lauderdale, Florida, was charged by bill of information for alleged health care fraud resulting in Medicare payments of about $54.3 million. Lacerda owned of pharmacies in several states, including Cure Pharmacy in Jacksonville, Florida. From 2017 to 2021, Lacerda, through his call center and through kickbacks and bribes to telemarketing companies, encouraged Medicare beneficiaries to accept expensive prescription medications they neither wanted nor needed. He also paid kickbacks and bribes to purported telemedicine companies to obtain signed prescriptions from physicians who had no relationship with the patients, rarely spoke to them, and made no determination of the medical necessity of the prescriptions.
• Christopher Thigpen, 48, of Hammond, Louisiana, was charged in a twelve-count indictment for his role in a scheme to defraud Medicare of about $54 million. From March 2014 to January 2021, Thigpen, through his diagnostic laboratories, Akrivis Laboratories LLC and Dynamic Diagnostics LLC, allegedly submitted thousands of claims for definitive urine drug testing and genetic testing to Medicare that were not medically necessary, not appropriately reimbursable, and tainted by kickbacks.
• John Manning, 61, of Ashland, Tennessee, a physician, was indicted for with conspiracy to commit health care fraud and health care fraud for allegedly billing Medicare for about $41 million for bogus claims for DME, topical creams, and cancer genetic testing.

The federal investigators noted a complaint, bill of information or indictment is an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.