Trump administration officials on Tuesday announced they uncovered $6.5 billion in fraudulent claims involving Medicare, Medicaid and other federal health care programs across 45 states and U.S. territories.
Acting Attorney General Todd Blanche said the Justice Department has in the past two weeks charged a record 455 people with defrauding the government with various billing schemes.
Officials said the fraudsters billed for services provided to dead people, ran a macabre skin grafting therapy that victimized elderly nursing home patients and, in one instance, collected government money for a negligent heart scanning service that failed to identify an obvious, fatal condition in a young basketball player.
Along with the arrests, the government seized luxury items purchased with proceeds from the shady health care claims, including a Rolls-Royce Phantom, a half-million-dollar Ferrari and an $865,000 necklace.
“This is just the beginning. Fraudsters can no longer rip off American taxpayers,” Mr. Blanche said.
The crackdown is a centerpiece of the Trump administration’s “full-scale war on fraud,” announced earlier this year, which spans all government agencies and is headed by Vice President J.D. Vance.
Much of the illegal activity stems from fraudulent Medicaid payments associated with hospice care and other services that target the elderly and medically vulnerable.
Tuesday’s indictment includes a hospice owner in Los Angeles who paid illegal kickbacks for the identities of dead Medicare beneficiaries whom he then billed as patients. The crackdown has led to the closure of 800 hospice facilities in the Los Angeles area.
“One of the ways we’ve been able to detect that fraud is that the patients never die. They live forever,” Health and Human Services Secretary Robert F. Kennedy Jr. said.
Mr. Kennedy said the government has retooled its fraud detection system and beefed up his department’s program integrity unit.
Instead of chasing fraudulent payments after the fact, the government is uncovering shady schemes and blocking federal payments using advanced Artificial Intelligence and data analytics to identify fraudulent billing patterns.
“The federal government paid claims first, and chased fraud after the money was out the door,” Mr. Kennedy said. “And that approach, of course, failed taxpayers. We are ending it.”
Center for Medicare and Medicaid Services Administrator Mehmet Oz said his department set up a “fraud war room,” which led to CMS revoking Medicare billing privileges for 1,400 fraudulent providers and suspending payments for services deemed illegitimate.
In the first half of this year, CMS suspended 1,000 Medicare payments. Nearly 80% of the claims were from California, he said.
One of the companies charged in the fraud sting billed the government $90 million for providing heart scans. The cardiovascular testing company hired doctors to scan echocardiograms marketed to parents of student athletes. Dr. Oz said one teenage athlete’s EKG was scanned for only 11 seconds and failed to identify a significantly enlarged heart.
“The October EKG was read as normal. The kid was dead a month later. This was not a diagnostic company. It’s a predatory scheme dressed up in medical clothing, and we’re going to treat it as such,” he said.
The government’s new data analytics team found new and disturbing trends in fraudulent federal health care claims.
Assistant Attorney General Colin M. McDonald said it picked up “a dramatic spike in payments” for a type of skin grafting procedure called allograft from less than $1 billion in 2021 to more than $14 billion four years later. Mr. McDonald said 11 individuals have been charged with fraud related to billing the government for the allograft services. They inflated the price by up to 50% and targeted vulnerable hospice patients.
One defendant, a nurse practitioner, billed Medicaid more than $1 billion for performing allografts on elderly patients. She used some of the proceeds to purchase a Ferrari and an $865,000 necklace.
“She was using human beings, American citizens, as living piggy banks,” Mr. McDonald said.
Some Democrats have labeled the Trump administration’s war on fraud as a war on blue states. But officials pointed out Tuesday that 18 of the states that participated in the latest fraud crackdown have Democratic governors.
“Fraud does not recognize party lines, and neither does accountability,” Mr. Kennedy said.
