The Justice Department has announced a massive fraud operation charging 455 individuals across 45 U.S. states and territories with healthcare fraud totaling $6.5 billion, primarily from Medicaid and Medicare programs.
Acting U.S. Attorney General Todd Blanche stated, “This is just the beginning.” He added that “fraudsters can no longer rip off American taxpayers. If you seek to harm or cheat Americans, we will find you, seize any assets, and prosecute you to the fullest extent of the law.”
Blanche described the effort as “the greatest combined federal and state effort in combating healthcare fraud in history.” Health and Human Services Secretary Robert F. Kennedy Jr., who attended a press conference, called it “the second largest amount ever charged in a single healthcare fraud operation” and “the largest Medicaid fraud enforcement action.”
Kennedy emphasized that these schemes targeted American taxpayers rather than government programs, noting that “every fraudulent dollar diverted into a criminal scheme is a dollar unavailable for patient care.”
The crackdown involved nine healthcare-fraud strike forces, 57 U.S. attorneys’ offices, 41 state attorneys general, and multiple police agencies. Eighteen of the participating states were blue states with Democratic governors.
Blanche and Kennedy cited examples of fraudulent activities, including unnecessary medical tests, prescription products, and opioid addiction schemes that led to patient deaths under false pretenses of receiving care.
In one case, an Arizona corporate executive was charged with more than $1 billion in fraud through unnecessary wound grafts. Blanche stated this scheme cost Medicare over $1 million per patient. The investigation also revealed a network involving 11 individuals accused of committing more than $2 billion in fraudulent wound-care schemes. These individuals used the funds for luxury items, including multi-million dollar homes, $800,000 Maseratis, jewelry worth hundreds of thousands of dollars, and a $4.6 million hotel in the Philippines.
The DOJ has seized over $182 million in cash and assets.
To address Medicaid fraud, Blanche announced the creation of the West Coast Strike Force, which filed charges against 295 individuals for alleged fraud totaling $518 million.
Kennedy detailed a Los Angeles-area hospice owner and two marketers who allegedly carried out a $27.7 million Medicare fraud scheme. The owner reportedly paid illegal kickbacks to obtain personal information of deceased Medicare beneficiaries. Kennedy noted that HHS closed 800 hospice facilities in the L.A. area, explaining that “in many of them, the patients never die.” This practice involved purchasing names from coroners and billing Medicare. Kennedy added that the individual allegedly purchased a Rolls Royce with the stolen funds.
Kennedy also criticized a policy implemented during the Biden administration by his predecessor at HHS, which he described as a “pay and chase” system. Under this approach, payments were made without checking for fraud before the end of the process. Kennedy stated that when he questioned the system, officials said they were instructed to focus on enrollment rather than fraud.
Dr. Robert Malone, former vice chair of the CDC’s Advisory Committee on Immunization Practices (ACIP), seconded Kennedy’s point in a recent online publication, noting that retrospective clawbacks have never been efficient and often result in funds being lost through offshore channels.
Kennedy stated HHS is replacing “pay and chase” with a “detect and prevent” system using advanced artificial intelligence and data analytics to identify fraud before any payments are made. He warned: “We will build a case and we will bring you to justice.”
By Paul Dragu