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The Department of Justice (DOJ) charged 345 people, including doctors,  nurses, and a variety of medical professionals allegedly involved in more than $6 billion in healthcare fraud. The DOJ's law enforcement action spanned 51 federal jurisdictions.

It is considered the largest takedown of healthcare fraud in the history of the department.

According to the Justice Department, the 345 defendants were responsible for submitting false and fraudulent claims that cost more than $6 billion to the federal health care programs and private insurers.

The submitted false and fraudulent claims included $4.5 billion related to telemedicine or telehealth, $1.5 billion connected to substance abuse treatment facilities or "sober homes," and over $806 million linked to other forms of healthcare fraud.

Court documents showed that 86 defendants were telehealth executives who allegedly paid doctors, nurse practitioners, and other medical professionals to order unnecessary large amounts of durable medical equipment, genetic and other diagnostic tests, and pain medications.

The defendants allegedly placed orders sometimes without any interaction or with only brief phone conversations with patients whom they never met or seen.  

Durable medical equipment companies, testing laboratories, and pharmacies purchased the orders and submitted claims false and fraudulent claims to Medicare and other government insurers. In exchange, they receive illegal kickbacks and bribes from telemedicine executives who placed the orders. 

Often, the medical equipment, test results, or medications were not even provided to the beneficiaries or were unnecessary and effectively worthless to patients. This type of flawed care, misdirection, fake diagnoses, and unneeded tests misled patients and delayed their chance to seek appropriate treatment for medical issues. 

The defendants allegedly laundered the proceeds obtained from the fraudulent scheme through international shell corporations and foreign banks for their personal benefits. 

In June, the Attorney General of New York filed a lawsuit against Frank Borgese and his company, Impact Medical & Surgical Solutions, for allegedly violating state laws by engaging in deceptive and fraudulent solicitation of sales of PPE, including N95 and KN95 respirator masks.

Telemedicine expansion leads to fraud

The telemedicine fraud takedown comes amid the COVID-19 pandemic when telehealth services have been greatly expanded. The potential for billing fraud and abuse with the healthcare system has unfortunately become easier for bad actors when some telehealth restrictions have been lifted in an attempt to get health services to vulnerable patients.