Consumer Fraud

Feds widen crackdown on $56-million Medicare fraud scheme in New Orleans

Pills Stethascope on Money 435x289 Feds widen crackdown on $56 million Medicare fraud scheme in New OrleansFederal prosecutors have widened their crackdown on a $56-million health care fraud scheme in the New Orleans area, announcing charges against seven more individuals, including two physicians, who allegedly billed Medicare for home health care services that were not medically necessary or were never provided.

The U.S. Justice Department announced Thursday that a New Orleans grand jury indicted the seven individuals, bringing the total number involved in the alleged fraud scheme to 13 defendants.

The indicted individuals operated six health care companies. Federal prosecutors say the individuals participated in the scheme through these companies, billing Medicare for home health services and medical equipment for Medicare beneficiaries when most of those products and services were not needed or never actually delivered.

The companies the Justice Department accuses of fraud are: Interlink Health Care Services Inc., Memorial Home Health Inc., Lakeland Health Care Services Inc., Lexmark Health Care LLC, Med Rite Pharmacy Inc. and Medical Specialists of New Orleans,

The indictment further alleges that two of the defendants participated in a kickback scheme with patient recruiters. In exchange for patient referrals, the defendants provided Medicare beneficiary numbers that were used to bill Medicare. To conceal these kickbacks, one of the defendants allegedly laundered Medicare money through a separate company he owned.

From 2007 through 2014, the companies allegedly involved in the scheme submitted more than $56 million in claims to Medicare, the majority of which are allegedly fraudulent.  Medicare paid approximately $50.7 million on those claims.

The Justice Department said that three of the indicted individuals have pleaded guilty to the false billing charges, which the U.S. says stretched from 2007 to 2014.

The case is being investigated by the Department of Human Health and Services and the FBI. The indictments are the result of findings made by the Medicare Fraud Strike Force, operating under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana.


U.S. Department of Justice