Over $100 million in fake medical bills found in SC health care fraud, prosecutor says

More than 40 people were charged with federal crimes for their roles in health care fraud schemes across South Carolina and Georgia, resulting in hundreds of millions of dollars in fraudulent bills, the U.S. Attorney’s office said Wednesday.

Many of them were medical professionals, according to a news release issued by Peter McCoy, the U.S. Attorney for South Carolina, and Bobby Christine, his counterpart in Georgia.

During a news conference, law enforcement called the joint investigation Operation Rubberstamp.

Four doctors and a nurse were charged last week in a telemedicine-based health care fraud and kickback conspiracy, involving more than $100 million in fraudulent billings in South Carolina, the U.S. Attorney’s office said. Dozens have previously been charged, McCoy said.

The medical providers are accused of signing prescriptions online, often without meeting or speaking with the patients, according to the release.

Additionally, charges were filed against eight people and one corporation related to a health care fraud and kickback conspiracy that used offshore call centers and fraudulent telemedicine to bill hundreds of millions of dollars for durable medical equipment that was not necessary, the U.S. Attorney’s office said.

“Those who steal from federal health care programs are taking money from the pockets of taxpayers. This is reprehensible,” McCoy said in the release. “Along with our federal law enforcement partners and our colleagues in the Southern District of Georgia, we have worked tirelessly to identify and prosecute those who seek to harm the citizens of South Carolina and Georgia. We have also ensured that millions of dollars have been returned, or will be returned, to these essential health care programs.”

McCoy said the fraud has grown during the COVID-19 pandemic. ”Bad actors” have gone from targeting people in rural areas who relied on telemedicine to get in touch with health care providers, to “criminals taking advantage of the pandemic,” where people scared of the coronavirus are using the online services more than ever before.

“Telemedicine has become a valuable tool for delivering health services in this time of pandemic. However, bad actors are abusing these tools to commit health care fraud,” Derrick L. Jackson, special agent in charge of the Atlanta region for the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS), said in the release. “When marketing and so-called telehealth services are misused, alleged violators can expect aggressive investigation and swift prosecution.”

In Georgia, four people were charged in the telemedicine-based fraud and kickback schemes, adding to the 26 defendants previously charged, according to the release. Three of them were medical professionals who are accused of participating in the telemedicine-based scheme, which now collectively totals in excess of $1.4 billion in fraudulent claims, the U.S. Attorney’s office said.

“This coordinated, deliberate, and methodical series of investigations and prosecutions in the Southern District represents an ongoing, exhaustive team effort with our law enforcement partners to protect the taxpayers’ safety net programs from fraud and theft,” Christine said in the release. “The warning should now be abundantly clear: Unscrupulous providers will find themselves in hot water if they attempt to illegally enrich themselves from these programs.”

The criminal network targeted by these investigations involves individuals and companies that collect patient data and sell it to one or more durable medical equipment suppliers, pharmacies, or labs, according to the release. Patients were often lured into the scheme by an international telemarketing network.

Court records show the co-conspirators’ promise of often inappropriate durable medical equipment, test results, and medication misled patients and delayed their chance to seek appropriate treatment for medical complaints. As part of these schemes, telemedicine executives allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen, the U.S. Attorney’s office said.

The filings allege that durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers, according to the release.

“Thousands of Americans have had their health jeopardized and personal information bartered, while these illegal enterprises have reaped our tax dollars,” said Jody Norris, special agent in charge of the Federal Bureau of Investigation (FBI) in Columbia. “The FBI, working with our federal partners, have stopped these criminal networks and we will remain dedicated to seeking out and dismantling others.”

The cases were investigated by agents from the FBI, HHS OIG, and Secret Service; specifically, Special Agents Neil Power, Su Kim, Ryan Schubert, Randy Dye, T.J. Smith, Dave Graupner, Karen Corbett, and Matt Britsch. The cases were prosecuted by Assistant U.S. Attorneys Jim May, Derek A. Shoemake, and Will Lewis with the District of South Carolina; Assistant U.S. Attorneys Tom Clarkson and Jonathan Porter with the Southern District of Georgia; and Assistant Chief Jacob Foster and Trial Attorney Catherine Wagner with the Department of Justice’s Health Care Fraud Strike Force.

“Fraudulent billing schemes cost every taxpayer and our health care system, and when it targets programs like Medicare that assist the elderly and poor, it potentially threatens their health care needs,” Chris Hacker, special agent in charge of the FBI in Atlanta, said in the release.

If convicted, maximum penalties for the charges can include 30-year prison sentences, according to Assistant U.S. Attorney Jonathan Porter with the Southern District of Georgia.

In April 2019, a nationwide kickback conspiracy that made about $1 billion in unlawful Medicare payments to some two dozen perpetrators was targeted by law enforcement in Operation Brace Yourself. In that investigation, hundreds of thousands of elderly and disabled Medicare patients were “lured” into the criminal scheme and ordered medically unnecessary braces, according to Sherri Lydon, the former U.S. Attorney for South Carolina.

Staff reporter John Monk contributed to this story.

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