Defendants Indicted In Health Care Fraud Scheme Targeting Medicare And Medicaid

The recent indictment of seven individuals across multiple states for a $40 million scheme to defraud Medicare and Colorado Medicaid through fraudulent genetic testing claims demonstrates the serious legal consequences of health care fraud. The case highlights how fraudulent activities can target government programs like Medicare and Medicaid, with the perpetrators using kickbacks, bribes, and money laundering to facilitate their schemes.

The defendants, associated with Tesis Labs, LLC, allegedly paid kickbacks to marketing companies in exchange for patient referrals—many of whom were elderly Medicare beneficiaries. The scheme involved unnecessary genetic testing, where the tests were neither required nor beneficial to the patients. As a result, fraudulent claims were submitted to Medicare and Medicaid, leading to millions of dollars in losses.

Key Legal Statutes Involved in Health Care Fraud Cases

This case is a clear example of how federal statutes are applied to health care fraud cases, particularly when dealing with large-scale schemes involving kickbacks, money laundering, and false claims. Consulting with an experienced healthcare fraud lawyer can help you understand the complex criminal statutes involving:

Health Care Fraud (18 U.S.C. § 1347)

This statute makes it illegal to knowingly execute a scheme to defraud health care benefit programs like Medicare and Medicaid. The defendants in this case are accused of submitting false claims for medically unnecessary genetic testing. Convictions under this statute can lead to up to 10 years in prison, with enhanced penalties if the fraud leads to serious bodily injury or death.

Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b))

The Anti-Kickback Statute prohibits paying or receiving anything of value to induce or reward referrals for services reimbursed by federal health care programs. In this case, the defendants allegedly paid kickbacks to marketers for patient referrals. Violations of this statute carry penalties of up to 5 years in prison, along with fines.

Conspiracy to Commit Health Care Fraud (18 U.S.C. § 371)

The defendants are charged with conspiring to defraud Medicare and Medicaid by collectively submitting fraudulent claims. Even if the fraud was not successful, simply conspiring to commit fraud can lead to penalties, including up to 5 years in prison.

Money Laundering (18 U.S.C. § 1956)

Some defendants face money laundering charges for conducting financial transactions with the proceeds from the fraudulent claims. Money laundering can lead to up to 20 years in prison, substantial fines, and forfeiture of assets.

False Claims Act (31 U.S.C. § 3729)

While this is a civil statute, it is often invoked in health care fraud cases. The False Claims Act imposes liability on those who knowingly submit false claims to the government. Civil penalties can include up to three times the amount of damages the government sustains, as well as per-claim penalties.

The Impact of Health Care Fraud on the Medical Industry

Health care fraud cases like this have far-reaching consequences, not only for the government but for patients, healthcare providers, and the medical industry as a whole. Fraudulent schemes undermine public trust in the healthcare system and divert critical resources away from legitimate care. When healthcare providers exploit vulnerable populations, such as the elderly, for personal financial gain, they risk harming patients while significantly increasing healthcare costs for everyone.

Moreover, health care fraud investigations are extensive, often involving multiple agencies like the Department of Health and Human Services (HHS), the Federal Bureau of Investigation (FBI), and the Internal Revenue Service (IRS). In the case of Tesis Labs, the investigation was led by these federal agencies, with the defendants facing serious criminal charges.

The Importance of Compliance Programs

Health care providers can reduce the risk of becoming involved in fraud investigations by implementing robust compliance programs. These programs help ensure that billing practices comply with federal regulations and that all medical services rendered are medically necessary and appropriately documented.

Compliance programs should include:

• Regular staff training on Medicare and Medicaid billing practices.
• Internal audits to monitor billing activities.
• Clear procedures for reporting suspected fraud or irregularities within the organization.
• Third-party evaluations to ensure that compliance measures are up-to-date with the latest laws and regulations.

Contact The Baez Law Firm

The indictment of individuals involved in a $40 million Medicare and Medicaid fraud scheme highlights the severe legal consequences of health care fraud. With charges ranging from health care fraud and kickbacks to money laundering, this case underscores the importance of strict compliance with health care regulations.

If you or someone you know is facing health care fraud charges, it is essential to seek experienced legal representation. The Baez Law Firm specializes in defending clients against complex fraud charges and is committed to protecting your rights. Contact us today for a consultation to discuss your case and explore your legal options.

Sources:

lawcommentary.com/articles/seven-defendants-indicted-in-40-million-medicare-fraud-scheme-involving-genetic-testing

justice.gov/usao-co/pr/seven-people-charged-over-40-million-medicare-and-medicaid-fraud