3 dozen individuals charged with $1.2 billion in alleged health care fraud

The Justice Department on Wednesday has announced charges against three dozen people who are accused of orchestrating health care fraud schemes across the country, with laboratory owners and company executives among those accused of ordering unnecessary or fraudulent medical tests and equipment worth $1.2 billion.

The defendants are accused of using telemedicine to obtain orders for the unneeded medical tests, which were then allegedly billed to Medicare and other insurance companies, the Justice Department said. According to court documents, the tests and equipment were frequently ordered without any interaction with patients and yielded little valuable information for the patients or their primary care doctors.

In many of the prosecutions, the owners and operators of medical laboratories are accused of paying illegal kickbacks and even bribes to telemedicine companies, medical professionals, and medical equipment companies in exchange for patient referrals to boost business for their personal gain, the department said.

“The Department of Justice is committed to prosecuting people who abuse our health care system and exploit telemedicine technologies in fraud and bribery schemes,” Assistant Attorney General Kenneth Polite, head of the Justice Department’s Criminal Division, said in a statement. “This enforcement action demonstrates that the department will do everything in its power to protect the health care systems our communities rely on from people looking to defraud them for their own personal gain.”

In one case, the owner of multiple clinical labs from Missouri allegedly devised a scheme in which marketing companies paid telemedicine centers to call patients and offer them no-cost, Medicare-approved cardiovascular and genetic testing that a medical professional was then paid to clear regardless of whether the patients actually needed them.

The owner, Jamie McNamara, and other co-defendants then allegedly used “shell laboratories” to submit false or unnecessary claims to Medicare for the unnecessary medical tests and equipment, worth more than $174 million. McNamara then allegedly laundered the profits through a “complex network” of bank accounts and assets including luxury vehicles, a yacht, and real estate.

McNamara, who is set to be arraigned in Louisiana next week, is accused of devising the scheme from 2018 to July of 2020 in order to profit via kickbacks and bribes. In all, investigators say McNamara and the co-defendants paid more than $16 million to various marketing companies to kickstart the fraudulent payments. An attorney for McNamara could not immediately be identified.

According to prosecutors, Wednesday’s charges include some of the first prosecutions in the country dealing with fraudulent cardiovascular genetic testing. Some of the medical professionals charged allegedly made referrals for the pricey and “medically unnecessary” tests despite the fact that such testing is not a Medicare-approved method of diagnosing whether an individual presently had the cardiac conditions at issue.

Wednesday’s billion-dollar announcement follows another coordinated law enforcement action last year in which 138 people were charged for their alleged involvement in telemedicine schemes and other health care fraud across the country that may have incurred more than $1.4 billion in losses.