Top 10 Medicaid Fraud Cases

Where there is money, there is often fraud, and this holds true with medicare and medicaid cases as well.

Believe it or not, there are actually many cases every year, accounting for millions of dollars that need to be recovered.

To give you an idea, here are the top 10 of the biggest cases and examples of medicaid fraud cases in the past few years.

1. Michigan Oncologist – 2015

In July of 2015, a Michigan oncologist by the name of Farid Fata was sentenced for healthcare fraud and money laundering. A whopping $17.6 million was recovered and he was sentenced to 540 months in prison.

The doctor was brought to trial in late 2014 when he pleaded guilty to 13 counts of healthcare fraud as well as two counts of money laundering.

Fata was a licensed medical professional who owned an operated a cancer treatment clinic with several locations in Michigan. His fraud was centered around administering unnecessary and aggressive treatments like chemotherapy, infusions and other treatments to over 500 patients to increase billing to Medicare and other insurance companies.

In addition, Fata submitted $34 million in fraudulent claims to Medicare, making this one of the more stunning cases in the past few years.

2. North Carolina Woman – 2015

In June of 2015, a North Carolina woman named Tracie Yvette Clay received a sentence of 70 months in prison and an order to pay nearly $1 million in restitution to North Carolina’s Medicaid program.

Her case of healthcare fraud was in relation to a scheme surrounding behavioral health services, an act that dates way back to 2011 when she set up “NC Behavioral Health and Counseling Services, Inc.”

Legally, the institution was only set up for administrative purposes rather than to administer professional services. Regardless, Clay submitted billings for Medicaid payments and claims for mental health treatments through clients who never received services and did not know that their Medicaid identification was being used.

Lastly, the bank account set up for the business was found to be used for almost entirely personal reasons rather than for actual legitimate reasons that would warrant funding from the Medicaid program. This includes splurges like a check for a $70,000 Cadillac and over $800,000 in other expenses.

3. Former Houston Hospital President – 2015

Also in June of that year, Earnest Gibson III, a former hospital president in Houston, was sentenced to 540 months in prison along with his son who received 240 months and a co-conspirator who received 144.

The fraud totaled up to a shocking $158 million in medicare fraud schemes and surrounded fake psychiatric claims dating back all the way to 2005.

The false claims were for partial hospitalization programs (PHP) which is a form of intensive form of outpatient treatment for mentally ill patients. The beneficiaries for whom the hospital billed Medicare did not qualify for or need these services and they rarely even saw psychiatrists or receive their treatment.

4. Wyeth and Pfizer – 2016

Jumping ahead to 2016, one of the largest recoveries yielded $1.2 billion and came from the drug/medical device industry, specifically from Wyeth and Pfizer Inc.

The case proved that Wyeth had knowingly reported fraudulent prices on acid reflux drugs Protonix Oral and Protonix IV. They failed to report deep discounts that were available to hospitals which is a legal requirement to ensure that Medicaid enjoyed the same pricing benefits as commercial consumers.

In the end, Wyeth ended up paying $413.2 million to the federal government and $371.4 million to Medicaid programs.

5. Novartis Pharmaceuticals Corp – 2016

Another drug company that faced charges for fraud in 2016 is Novartis Pharmaceuticals Corp who ended up paying a $390 million settlement for claims of kickbacks to specialty pharmacies in exchange for recommendations of the drugs Exjade and Myfortic.

In their kickback scheme, Novartis Pharmaceuticals Corp violated the False Claims Act and the Anti-Kickback Statute.

To make things worse, not only did the company have pharmacies push these drugs, they also did so in spite of their knowledge of the drug’s serious and potentially life-threatening side effects.

6. National Takedown – 2017

The largest healthcare fraud takedown at the time actually happened in July of 2017 and involved more than 400 defendants (115 of which were medical professionals) in 41 federal districts.

The fraud schemes involved a total of a startling $1.3 billion in false billings to Medicare and Medicaid.

This enormous takedown was responsible for an 89% increase in health care fraud takedown from the previous year, spiking the amount that the government received in settlements from these types of cases.

Though there are fewer specifics with this case in terms of names and other details due to the mere enormity of the situation, the record-breaking nature of the case makes it one of the most notable in history.

7. National Takedown – 2018

Just to top off the prior year’s takedown, the national takedown in 2018 continued to break records through $2 billion in losses to Medicare and Medicaid and over 600 defendants.

Much like with the prior year, there were dozens of federal districts involved and the bust continued to boost the amounts of funds recovered from healthcare fraud schemes.

In this case, 165 medical professionals were included and fraud involved things like the prescription and distribution of opioids and dangerous narcotics, contributing to the epidemic of addition and drug abuse that has skyrocketed over the past few years.

Claims for these dangerous drugs were submitted to Medicare and Medicaid, adding fraud and financial loss to the perpetuation of a serious problem.

8. Florida Clinic Owner – 2018

For a more specific case in 2018, a co-owner of medical and rehabilitation clinics in Miami, Florida was ordered to pay $4 in restitution for his role in a $10 million scheme. In addition, he was also sentenced to over 8 years in prison.

The individual, Vladimir Prado Sr., submitted false claims to insurance companies and Medicare alike, with his Medicare claims totaling to around $2.2 million for various benefits that were not medically necessary.

Additionally, Prado provided the funding to purchase a fraudulent home health agency that further contributed to the false claims and abuse.

9. Florida Doctor – 2019

Believe it or not, there are already some considerable cases in this current year. In 2019, a Florida doctor pays a nearly $1 million settlement in a case with alleged False Claims Act violations.

The claims against Dr. Nathan Hanflink arose from an improper financial relationship with a drug testing laboratory. More specifically, he received payments to make referrals to Universal Oral Fluid Laboratories and caused false claims to be submitted to Medicare for drug testing services.

The financial arrangement between the doctor and the lab was found to violate the physician self-referral law (the Stark Law) and the Anti-Kickback Statute.

10. Los Angeles Dentist – 2019

Lastly, another case in 2019 involves a Los Angeles Dentist named Benjamin Rosenberg who received a 40 month sentence for his role in a $3.8 million scheme.

He submitted and was involved in additional submissions of false claims to various insurance companies for dental care that was not rendered. He was well aware that these crowns and fillings were never provided and pleaded guilty in January of this year.

His claims impacted a range of insurance providers, including Medicare and a number of private providers.

In Summary

There are seemingly countless cases of Medicaid fraud over the years that often involves millions of dollars.

Law enforcement is becoming increasingly better at catching these schemes, though, which leads to impressive busts like:

  • The Michigan Oncologist (2015)
  • The North Carolina Woman (2015)
  • The Former Houston Hospital President (2015)
  • Wyeth and Pfizer (2016)
  • Novartis Pharmaceuticals Corp (2016)
  • The 2017 National Takedown
  • The 2018 National Takedown
  • The Florida Clinic Owner (2018)
  • The Florida Doctor (2019)
  • The Los Angeles Dentist (2019)