Congress continues to discuss the state of America’s healthcare system. There is no question that Medicare and Medicaid are stretched thin, while insurers and healthcare companies seem to be making millions. One reason for that is because of various schemes of healthcare fraud. Recently, the federal government uncovered a Medicare scam involved over $1.2 billion worth of orthopedic braces, called ‘Operation Brace Yourself.’

According to the Justice Department, individuals located overseas used call centers to get Medicare numbers from various beneficiaries. Telemarkets reached out to senior citizens, telling them they would get ‘free’ orthopedic braces. Anyone interested would be sent through to these overseas call centers, largely based in the Phillippines and Latin America.

The patients’ Medicare coverage would get verified, and they would then speak to doctors over the phone, who would provide prescriptions for braces whether or not the patient was in need. In some cases, patients would receive multiple braces. The call centers collected these prescriptions and sold them to Medical Equipment Companies who billed Medicare. Each brace would often carry a charge of $500 to $900, with kickbacks estimated around $300 per brace. Money from the scheme was laundered through several offshore shell companies and bank accounts. The proceeds were used to buy luxury vehicles, yachts, and homes around the world.

Twenty-four people have been charged for their involvement in this scheme, and at least 130 medical equipment companies have been implicated. The defendants include executives associated with telemedicine companies and owners of durable medical equipment (DME) and doctors. Defendants have been found across the country, including California, Florida, and Texas. The Justice Department found out about the scam after Medicare beneficiaries began complaining to the Medicare fraud hotline.

This is one of the largest Medicare fraud schemes that has been detected by the government. At least $1.7 billion was billed for, but only $1.2 billion was actually paid out. Officials hope to recoup at least some of the money by seizing assets and bank accounts, and the property that was acquired as a result of the scam. It is unlikely that all of the money will be recovered, thanks to the policy that Medicare pays bills promptly – often before fraudulent practices are detected.

In addition to the harm to the program, beneficiaries who provided their personal information could be harmed in the future. Their information could be resold for multiple illicit purposes, which could result in waiting periods from Medicare, which limits how frequently it pays for specific supplies. So, those beneficiaries who might actually need a brace in the future could face delays and questions.

In one case, a patient living in New York received a box of back and knee braces sent to him by a medical supply company in Florida. The prescription was from a doctor in North Caroline. The patient apparently stated to his family that he had neither seen nor heard of the doctor and had not asked for the braces, which cost Medicare nearly $3,000.00. The investigation was part of the Fraud Section’s Medicare Fraud Strike Force. It was established in 2007, and since then, it has charged close to 4,000 individuals for over-billing Medicare over $14 billion collectively.

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