U.S. Says Taxpayers Lost $1.3 Billion in Health-Care Fraud Cases

July 13, 2017, 7:22 AM PDT
  • Attorney General Jeff Sessions announces nationwide sweep
  • Hundreds charged in illegal drug and treatment billing schemes

More than four hundred people were charged in a sweeping crackdown on health-care fraud that cost taxpayers $1.3 billion, in part through bogus treatment programs that contributed to the country’s opioid epidemic, Attorney General Jeff Sessions said on Thursday.

Sessions called the nationwide takedown the largest in U.S. history, with doctors and other individuals charged for improperly prescribing and distributing opioids and other narcotics and billing Medicaid and Medicare. Of the 412 people charged, 56 were doctors and 120 cases were related to opioids, Sessions said. Arrests were made in cities including Chicago, Detroit, Los Angeles and Miami, as well as in southern Florida, which is home to hundreds of residential drug addiction treatment centers.

“Too many trusted medical professionals like doctors and nurses and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Sessions, speaking at a press conference at the Justice Department in Washington. “Amazingly, some have made the practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed.”

Federal prosecutors, some of whom have been working on cases for a year or more, were directed to accelerate their efforts in time for Thursday’s announcement, a person familiar with the matter said. The Government Accountability Office did an investigation and found last year that the sign-up process for the Affordable Care Act exchanges was “vulnerable to fraud.”

Obamacare Fight

The health-care fraud takedown comes as a fight brews in Congress over how much money to allot for opioid treatment and as Republicans spar over how to repeal or replace the ACA. Some Republicans want more funding to help states combat the opioid addiction epidemic, which is estimated to have killed 33,000 Americans last year. Changes to a Senate bill expected to be released later Thursday may include more money, but it’s unclear if it will secure the 50 votes needed to pass.

More than 500,000 people received high amounts of opioid painkillers out of the 43.6 million who were signed up for Medicare’s optional prescription drug benefit last year, according to a report on opioid use released Thursday by the Office of Inspector General for the Department of Health and Human Services, which investigates waste, fraud and abuse in government health programs, including Medicare and Medicaid. A high amount is considered equivalent to 12 Vicodin 10 milligram tablets or 16 Percocet 5 milligram pills a day for at least three months.

The report also identified 401 doctors who had questionable prescribing practices and were either giving opioids to patients who already received a high number or those who appeared to be doctor shopping. Those doctors wrote a total of 256,260 opioid prescriptions at risk of abusing the painkillers, costing Medicare $66.5 million. Oxycodone was the most commonly prescribed opioid.

Opioid Epidemic

More than 33,000 Americans died from opioid overdoses in 2015, according to the National Institute on Drug Abuse. About 19,000 of those deaths are linked to heroin and synthetic opioids such as fentanyl. The overdose numbers are typically updated at the end of the year.

Southern Florida has the biggest concentration of residential treatment centers in the country — hundreds are based mainly in single-family homes in and around Delray Beach, a small town in Palm Beach County, north of Miami. A December 2016 grand jury report commissioned by the State Attorney for Palm Beach County found addiction treatment centers to be rife with operators who use deceptive marketing, illegal patient brokering and fraudulent insurance claims to profit from addicts.

Fraudulent claims became so rampant that Cigna Corp., the fourth-biggest U.S. health insurer, quit Florida’s Obamacare market in the fall of 2015, ahead of the sign-up period for 2016 plans. At the time, the company blamed fraudulent and abusive practices by drug-treatment centers for driving up its costs.