Medicare And Medicaid Fraud Cases
Background: What is Medicare and Medicaid Fraud?
Medicare and Medicaid fraud involves the intentional deception or misrepresentation by healthcare providers, patients, or companies to obtain unauthorized payments or benefits from these government health programs. Such fraud causes billions of dollars in losses annually.
Common types of fraud include:
Billing for services not rendered
Upcoding (billing for more expensive services than performed)
Kickbacks for patient referrals
Falsifying patient diagnoses
Unnecessary medical procedures or tests
Prescription fraud
Federal laws used to prosecute include:
False Claims Act (31 U.S.C. §§ 3729–3733)
Health Care Fraud Statute (18 U.S.C. § 1347)
Anti-Kickback Statute (42 U.S.C. § 1320a–7b(b))
Stark Law (42 U.S.C. § 1395nn)
Detailed Case Studies
1. United States v. UnitedHealth Group (2007)
Facts:
UnitedHealth Group, one of the largest health insurers, was accused of overbilling Medicare by inflating the severity of illnesses to increase reimbursements.
Charges:
Violations of the False Claims Act due to fraudulent billing practices.
Outcome:
UnitedHealth agreed to pay $350 million to settle allegations without admitting wrongdoing.
Significance:
One of the largest settlements in Medicare fraud involving a major insurer, highlighting the risk of systemic upcoding.
2. United States v. Dr. Farid Fata (2014)
Facts:
Dr. Farid Fata, a Michigan oncologist, deliberately misdiagnosed patients and administered unnecessary chemotherapy to increase Medicare and Medicaid billings.
Charges:
Health care fraud, money laundering, and conspiracy.
Outcome:
Pleaded guilty and sentenced to 45 years in prison. Ordered to pay $17 million in restitution.
Significance:
This case is a landmark in prosecuting egregious medical abuse and patient harm linked to fraudulent billing.
3. United States v. Health Management Associates (2014)
Facts:
Health Management Associates (HMA), a hospital chain, was accused of performing unnecessary cardiac and vascular procedures to inflate Medicare and Medicaid reimbursements.
Charges:
Violations of the False Claims Act.
Outcome:
HMA paid $260 million in a settlement with the Department of Justice.
Significance:
The case highlighted aggressive corporate practices leading to unnecessary treatments and fraud.
4. United States v. Steven T. White (2016)
Facts:
White operated a durable medical equipment company that billed Medicare for hundreds of thousands of unnecessary or never-delivered medical devices.
Charges:
Health care fraud and false claims.
Outcome:
Convicted and sentenced to 10 years in prison, with orders to pay over $50 million in restitution.
Significance:
Illustrated fraud in medical equipment supply chains, a growing area of Medicare abuse.
5. United States v. Avrom “Avi” S. Gross (2012)
Facts:
Gross, an orthopedic surgeon, submitted fraudulent claims for medically unnecessary procedures and falsified records to Medicaid.
Charges:
Health care fraud and false statements.
Outcome:
Sentenced to 7 years in prison and ordered to pay millions in restitution.
Significance:
Demonstrated individual physician-level fraud and heavy penalties for false claims.
6. United States v. Depomed Inc. (2017)
Facts:
Pharmaceutical company Depomed was accused of paying kickbacks to doctors and pharmacists to promote its drug for Medicare beneficiaries.
Charges:
Violations of the Anti-Kickback Statute.
Outcome:
Depomed agreed to pay $7 million to settle the allegations.
Significance:
Showed enforcement focus on illegal incentives influencing prescription patterns under Medicare.
7. United States v. Orthofix Inc. (2016)
Facts:
Orthofix, a medical device manufacturer, paid kickbacks to surgeons and hospitals to encourage the use of their devices billed to Medicare.
Charges:
Anti-Kickback violations and False Claims Act breaches.
Outcome:
The company paid $7.3 million in settlements.
Significance:
Reinforced crackdown on illegal marketing and referral practices within Medicare-funded services.
Legal Principles and Enforcement
False Claims Act (FCA):
Empowers whistleblowers to file lawsuits (qui tam suits) on behalf of the government.
Allows triple damages and penalties for fraudulent claims.
Health Care Fraud Statute (18 U.S.C. § 1347):
Criminalizes knowingly executing a scheme to defraud Medicare/Medicaid.
Anti-Kickback Statute:
Prohibits payment of anything of value to induce referrals for services reimbursable by federal health programs.
Sentencing and Penalties:
Prison sentences often range from several years to decades.
Monetary penalties include restitution, fines, and exclusion from federal healthcare programs.
Summary Table
| Case | Fraud Type | Charges | Outcome |
|---|---|---|---|
| United States v. UnitedHealth Group | Upcoding/Overbilling | False Claims Act | $350 million settlement |
| United States v. Farid Fata | Unnecessary chemotherapy | Health care fraud, money laundering | 45 years prison + $17 million restitution |
| United States v. HMA | Unnecessary cardiac procedures | False Claims Act | $260 million settlement |
| United States v. Steven White | Fraudulent medical equipment | Health care fraud | 10 years prison + $50 million restitution |
| United States v. Avrom Gross | False claims and records falsification | Health care fraud | 7 years prison + millions restitution |
| United States v. Depomed | Illegal kickbacks | Anti-Kickback Statute | $7 million settlement |
| United States v. Orthofix | Kickbacks for medical devices | Anti-Kickback, False Claims Act | $7.3 million settlement |
Conclusion
Medicare and Medicaid fraud prosecutions target a wide spectrum of misconduct—from individual doctors to large corporations—through civil and criminal statutes. These cases demonstrate the government's aggressive pursuit of fraud to protect public health funds and maintain program integrity.
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