U.S. charges hundreds in healthcare fraud, opioid crackdown

Grant Boone
July 1, 2018

The U.S. Justice Department on Thursday announced it has charged 601 people, including doctors and nurses, for their alleged role in a scheme involving health care fraud and opioid-related crimes that resulted in more than $2 billion in losses.

The defendants are among hundreds charged across the United States in cases that cumulatively allege $2 billion in bogus billings.

According to the Justice Department, the medical professionals were perpetuating the nation's opioid epidemic by unlawfully distributing prescription painkillers. They are accused of submitting false claims to Medicare, Medicaid, Tricare (a program that offers insurance coverage to US military members, veterans and their families), and private insurance companies.

"What health care fraud is at the end of the day, at its base level, is it's theft and it's drug dealing", U.S. Attorney Russell Coleman said.

"There is an incredible array of scams, some of which involve services that are never provided, and some of which use complicated and sophisticated ruses to hide illegal acts, such as bribes", said First Assistant U.S. Attorney Tracy L. Wilkison, in a statement.

In one of the cases, prosecutors unsealed charges against nine new defendants in operation "Spinal Cap", which they say targets a long-running spinal surgery kickback swindle that generated almost $1 billion in fraudulent claims to federal, state and private insurers.

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They were among 13 people, including five doctors, a chiropractor, three licensed physical and occupational therapists and two pharmacy owners charged with Medicare and Medicaid fraud. Patino is charged with receiving kickbacks and bribes to refer patients to certain labs.

- William Parker, 64, of Redondo Beach, was charged in a separate indictment unsealed Wednesday in connection with the same kickback scheme involving Carrico and his companies. The charges also involved unnecessary prescription drugs and compounded medications.

Ashlee McFarlane, former federal prosecutor and partner at Gerger Khalil & Hennessy, told Healthcare Dive via email that the takedown shows DOJ "is committing significant resources to criminally prosecuting anyone who prescribes drugs or distributes opioid prescriptions outside the normal course of medical practice". Officials said Ruiz operated a false-front pharmacy where he stole and used the identities of patients and doctors to bill for prescriptions that patients never received, resulting in approximately $858,000 being paid out in fraudulent proceeds.

The Department of Health and Human Services announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which include 587 providers for their conduct related to opioid diversion and abuse.

- Juan Carlos Enriquez, 31, of Van Nuys, a pharmacy technician and marketer. The treatment facility's CEO, Paul R. Materia, 43, and patient brokers Joseph Lubowitz, 29, and Christopher Fuller, 33, were charged with illegally recruiting patients, paying kickbacks and defrauding healthcare programs by billing for urine testing and substance abuse treatment that were medically unnecessary.

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