Feds break up largest Medicare fraud scheme ever uncovered: 1.2 billion dollar scam

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Federal authorities say they've broken up a $1.2 billion Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors via foreign call centers.

The Justice Department announced charges Tuesday against 24 people across the U.S., including doctors accused of writing bogus prescriptions for unneeded back, shoulder, wrist and knee braces. Others charged included owners of call centers, telemedicine firms and medical equipment companies.

Medicare's anti-fraud unit said it's taking action against 130 medical equipment companies implicated. They billed the program a total of $1.7 billion, of which more than $900 million was paid out.

Telemarketers would reach out to seniors offering "free" orthopedic braces, also touted through television and radio ads. Beneficiaries who expressed interest would be patched through to call centers involved in the scheme. Officials described an "international telemarketing network" with call centers in the Philippines and throughout Latin America.

The doctors would write prescriptions for orthopedic braces, regardless of whether the patients needed them or not. In some cases several braces were prescribed for the same patient.

The call centers would collect prescriptions and sell them to medical equipment companies, which would ship the braces to beneficiaries and bill Medicare. Medical equipment companies would get $500 to $900 per brace from Medicare and would pay kickbacks of nearly $300 per brace.

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