Healthcare News & Insights

Feds bust largest Medicare fraud ring yet

The ring, focused on identity theft and Medicare fraud, is part of a larger group of general swindlers, according to information released by prosecutors.

How it worked: The Los Angeles-based gang used real patient names and real doctors’ information to submit bills for more than $100 million in claims for medical procedures and tests that never happened. The group set up more than 118 phony health clinics — often just an address at a Mail Boxes, Etc. — to appear legit enough to get a check cut by Medicare.

The names came from information stolen from a variety of places, including one large batch of 3,000 patient names that originated at one medical facility in New York state.

Some of the claims, such as a forensic pathologist with living breathing patients, raised red flags with Medicare auditors — but often not before the scammers were paid. All told, the group collected about $35 million over the past four years.

The brashness of the scam didn’t hurt it’s effectiveness: The clinics looked just official enough, for long enough. The ring exploited Medicare’s tendency to be “user-friendly” (as one U.S. attorney described it) and pay claims quickly.

So far, 18 people have been arrested and face a variety of charges. All have pleaded not guilty, and most are free on bail.

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