Feds Put an End to $1.2 Billion Medicare Brace Scam

Feds Put an End to $1.2 Billion Medicare Brace Scam

In one of the largest fraud take-downs yet, federal agents broke up a $1.2 billion Medicare brace scam earlier this month. Twelve people were charged. These 12 included doctors who wrote bogus prescriptions for hundreds of thousands of Medicare beneficiaries nationwide for unneeded orthopedic equipment, such as knee, shoulder, wrist and back braces. Charges were also placed against international call centers collecting beneficiaries’ Medicare numbers, complicit telemedicine centers providing prescriptions and at least 130 durable medical equipment (DME) companies sending these unneeded, and many times unwanted, braces to beneficiaries. Thousands of “on-the-ground” cases reported by our California Senior Medicare Patrol and SMPs across the country to higher up government agencies helped start the trail, and the FBI, the IRS and 17 U.S. attorney’s offices all took part in this take-down.

This mega-scam involved cold calls from international call centers as well as newspaper, TV and radio ads for “free” braces covered by Medicare with numbers linking to these call centers. The calls often go like this:

Call center rep: “Are you in pain?”

Beneficiary: “Well yes.” (Who doesn’t have some kind of pain?!)

Call center rep: “Well, we can help. We just need a bit of information and your Medicare number. And, if it looks like you qualify, we’ll connect you with a doctor who can get you the brace(s) you need, all fully covered by Medicare.”

Then the call center rep asks for the beneficiary’s weight, height, and, in even some of the cases reported to our California SMP, they ask for shoe size. Once they collect this information with the beneficiary’s Medicare number, the call center rep transfers the beneficiary to a doctor at a telemedicine company. The doctor “confirms” the diagnosis and need for a brace and often says something like, “We’ll take care of the paperwork and send you an ankle brace. By the way, would you also like a back and knee brace? We can just throw those in as well.”

The doctor then submits paperwork to the DME supplier company that then drop ships out the brace(s). These DME suppliers pay the international telemarketer companies for leads, and pay the doctors per prescription written. And Medicare pays them, often times as much as $500 to $900 per brace.

 

Beneficiaries then receive a brace, and in many cases multiple unneeded and/or unwanted braces. The cost of these braces are billed to Medicare using the beneficiaries’ Medicare numbers, which means that in the future, if these beneficiaries really do require a brace or some such equipment that was previous billed to Medicare by a scammer, Medicare will deny the claim.

 

To protect yourself from such DME scams and fraud, follow these tips from the recent Office of Inspector General alert:
  • If you receive a call from someone offering you a free brace that will be billed to Medicare, hang up immediately.
  • If medical equipment is delivered to you, don’t accept it unless it was ordered by your physician. Refuse the delivery or return it to the sender. Keep a record of the sender’s name and the date you returned the items.
  • Be suspicious of anyone who offers you free medical equipment and then requests your Medicare number. If your personal information is compromised, it may be used in other fraud schemes.
  • A physician that you know and trust should approve any requests for equipment to address your medical needs.
  • Medicare beneficiaries should be cautious of unsolicited requests for their Medicare numbers. If anyone other than your physician’s office requests your Medicare information, do not provide it.
  • If you suspect Medicare fraud, contact the HHS OIG Hotline online or by phone at 1-800-447-8477.

You can also contact our California Senior Medicare Patrol (SMP) at 1-855-613-7080.

More information:

Photo is from the Department of Health & Human Services, Office of Inspector General, as HHS Office of Inspector General agents take part in arrests on Tuesday April 9, 2019 in Queens N.Y. as they break up this billion dollar Medicare brace scam.

Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

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