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WASHINGTON  — Federal authorities said Tuesday they’ve broken up a $1.2 billion Medicare scam that peddled unneeded orthopedic braces to hundreds of thousands of seniors via foreign call centers.

The Justice Department announced charges against 24 people across the U.S., including doctors accused of writing bogus prescriptions for unneeded back, shoulder, wrist, and knee braces. Others charged included owners of call centers, telemedicine firms, and medical equipment companies.

The Health and Human Services inspector general’s office said the fast-moving scam morphed into multiple related schemes, fueled by kickbacks among the parties involved. The FBI, the IRS, and 17 U.S. attorney’s offices took part in the crackdown. Arrests were made Tuesday morning.


Medicare’s anti-fraud unit said it’s taking action against 130 medical equipment companies implicated. They billed the program a total of $1.7 billion, of which more than $900 million was paid out.

Telemarketers would reach out to seniors offering “free” orthopedic braces, also touted through television and radio ads. Beneficiaries who expressed interest would be patched through to call centers involved in the scheme. Officials described an “international telemarketing network” with call centers in the Philippines and throughout Latin America.


The call centers would verify seniors’ Medicare coverage and transfer them to telemedicine companies for consultations with doctors.

“The telemedicine we are talking about is basically a tele-scam,” said Gary Cantrell, who oversees fraud investigations for the HHS inspector general’s office. “We are not talking about the use of advanced technology to provide better access to care.”

The doctors would write prescriptions for orthopedic braces, regardless of whether the patients needed them or not. In some cases several braces were prescribed for the same patient.

The call centers would collect prescriptions and sell them to medical equipment companies, which would ship the braces to beneficiaries and bill Medicare. Medical equipment companies would get $500 to $900 per brace from Medicare and would pay kickbacks of nearly $300 per brace.

The scam was detected last summer, officials said. Complaints from beneficiaries were pouring in to the Medicare fraud hotline, and some consumer news organizations warned seniors. As the investigation progressed, Cantrell said, federal agents gained cooperation from people familiar with the various schemes.

Officials said it’s one of the biggest frauds the inspector general’s office has seen. Charges were being brought against defendants in California, Florida, New Jersey, Pennsylvania, South Carolina and Texas.

“The breadth of this nationwide conspiracy should be frightening to all who rely on some form of health care,” IRS criminal investigations chief Don Fort said in a statement. “The conspiracy … details broad corruption, massive amounts of greed, and systemic flaws in our health care system that were exploited by the defendants.”

Health care fraud is a pervasive problem that costs taxpayers tens of billions of dollars a year. The true extent of it is unknown, and some cases involve gray areas of complex payment policies.

Experts say part of the problem is that Medicare is required to pay medical bills promptly, which means money often goes out before potential frauds get flagged. Investigators call that “pay and chase.”

In recent years, Medicare has tried to adapt techniques used by credit card companies to head off fraud. Law enforcement coordination has grown, with strike forces of federal prosecutors and agents, along with state counterparts, specializing in health care investigations.

The Medicare beneficiaries drawn into the orthopedic braces scam didn’t have to pay anything up front, but Cantrell said they have been harmed as well: A beneficiary’s private information, once in the hands of fraudsters, can be resold for many illegal purposes.

Additionally, if a beneficiary whose information was misused ever does need an orthopedic brace, he or she may encounter waiting periods from Medicare. The program limits how often it pays for certain supplies and equipment.

“It can be very attractive to receive equipment,” Cantrell said. “But after giving out your identifying information, it could be compromised to perpetuate additional fraud. There is no fraud without the ID number of a Medicare beneficiary.”

—Ricardo Alonso-Zaldivar

  • I have received quite a few calls saying they are with medicare and today said they were from orthapedic medical. Calling about my ned for braces. This time I gave them my doctors name, last 4 of ss . They already had my name and address.
    The number they called from is 503-381-9576. I am praying this is legit.
    Let me know for sure.
    Darn scammers anyway. If fed got them they didn’t get all and they are back in business.

  • Obviously, the crackdown didn’t stop them. I just got a call 5 minutes ago and this isn’t the first time they have called. My question is how did they get our name and phone number. Why would they think my husband needed braces. He did see an orthopedic surgeon for his knee a few months ago at Kaiser. Could they be involved?

  • We received different braces in the mail that we never saw a dr. And never ordered them, spent many hours calling the companies and asking for return labels, now still trying to get them refunded to the Medicare account

  • I get at least SEVEN calls a day, in fact I actually talked to the agent and asked him to PLEASE take me off their list. HE HUNG UP ON ME. I have Verizon’s call filtering and they still come through!! Whatever you’ve done already ISN’T WORKING!

  • Today is June 19, 2019:
    I am STILL receiving these calls; I have blocked endless numbers on both my home and cell phone. I have had 5-6 in last few days. Most recent number is (561) 437-1054 for the 7 or 8 calls. These calls say press 9 to be removed from the list, but 9 doesn’t work. scam scam scam
    Why is this still happening?

  • I have received two boxes of braces…….one from Key which Medicare and my supplement paid………Braces were returned…….One from Avodale HME Braces were returned BUT they deny receiving them………..A MD in Columbia SC Dr Michael Huncharek.. SC license nr 20553 I have requested any medical records that would.him to prescribe for a patient.that he has never seen……I have also tried to reach the whistle blowers regarding this matter rdo

  • my mother and I receive calls everyday and we tell them we are not interested and do not continue to call. they call my 92 year old mother 2-3 times a say at all times of the day and night. What should we do?

    • Use caller ID and don’t answer any calls from a number you don’t recognize. If it’s important they’ll leave a message. If you get multiple calls from the same number, block it.

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