130 medical equipment companies defrauded Medicare out of $1.3 billion, FBI says

Apr 10, 2019, 3:32 PM
Operation Brace Yourself Medicaid Scheme...
Operation Brace Yourself broke up a fraud scheme that FBI agents say conned the government out of $1.2 billion. (Photo: Department of Health and Human Services, Office of Inspector General via AP)
(Photo: Department of Health and Human Services, Office of Inspector General via AP)

Medical equipment companies, telemedicine companies, and licensed doctors collaborated together to defraud the U.S. government’s Medicaid program out of $1.3 billion, the FBI says.

The FBI and the Department of Justice announced yesterday that, through an operation they called “Operation Brace Yourself”, they managed to implicate 24 people and 130 companies in a program that took advantage of the elderly to leech up to $22 million a week out of the Medicaid program for five years.

The $1.2 billion Medicaid scam

This wasn’t a scam perpetrated by some two-bit crook; it was a massive, multi-million dollar campaign funded by licensed medical brace manufacturing companies.

The medical brace manufacturing companies, the FBI says, hired call centers in the Philippines and throughout Latin America to talk to Medicaid patients and try to convince them they needed a medical brace.

The patients would be sent targeted ads promising “free to low-cost durable medical braces” and would be encouraged to call into the call center. They would never be physically inspected and would never meet with a doctor; instead, the companies would simply pay physicians to write up prescriptions for anyone who called.

A few days later, a neck brace or a knee brace would show up at the elderly patient’s house, whether they would need it or not, and the bill would be sent off to Medicaid, who would be forced to pay sometimes thousands of dollars for a piece of medical equipment the patient never actually needed.

Utahns weren’t safe from the scheme; one KSL Newsradio listener called into the Dave & Dujanovic show and shared that her mother had almost been a victim of what appears to be this very scheme.

“My mother got a back brace she didn’t need and didn’t even ask for it,” the listener says. “I wrote them a letter and said I will turn them in for Medicare fraud if they do not refund her account and Medicare. I’m a registered nurse, and I told them: ‘I know how this works, and it’s fraud.’”

That savvy nurse was able to get her mother her money back, but millions of other people across the country weren’t so lucky.

The scheme was incredibly profitable, the FBI says, with the perpetrators buying yachts, mansions, and luxury cars at taxpayers’ expense.

“The taxpayers should be outraged by this,” Gary Cantrell of Health and Human Services told NBC News. “These are losses to the Medicare program that we all, as taxpayers, fund.”

137 medical brace companies have had Medicaid payments cut off by the federal government over accusations that they were complicit in the scheme.

More to the story

KSL Newsradio’s Dave & Dujanovic shared some incredibly helpful tips for anyone who might think they’re being taken advantage of by a scam like this one.

If you missed their show live on the air, you can still catch what they had to say on the Dave & Dujanovic podcast:

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.

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130 medical equipment companies defrauded Medicare out of $1.3 billion, FBI says