Three more plead guilty in $71 million Brooklyn Medicare fraud scheme

Three more people have pled guilty in a Medicare fraud scheme based in Brooklyn, NY that literally involved a “Kickback Room”, a wall of which was adorned with a Soviet-era poster (pictured above) encouraging patrons not to gossip because “It’s not far between gossip and betrayal.”

The scheme at the Bay Medical Clinic, which involved thousands of Russian “patients”-people of other ethnicities were turned away-revolved around paying patients $50-100 per visit in order to submit false claims for physical therapy and other services that were either unnecessary or not provided.  These claims totaled close to $72 million; the clinic was reimbursed $46.9 million.

During its investigation of the clinic, the government installed a camera and microphone in the Kickback Room and recorded approximately 1,000 bribes totaling more than $500,000 in just a six week period in mid-2010.

Fifteen people were arrested on July 16, 2010 at the Brooklyn clinic, including two physicians.  One of the physicians, Dr. Jonathan Wahl, reportedly lived in a penthouse apartment, drove a Mercedes and owned a yacht.  He was released on $500,000 bail; I have not seen that he has gone to trial or been sentenced yet.

The arrests were part of an organized takedown in five states that netted 94 arrests for Medicare fraud totaling $251 million.

So far 10 of the people arrested from Bay Medical Clinic have pled guilty.  The remaining conspirators go to trial on January 22, 2013.

Two of the people who just pled guilty face up to 10 years in prison and the third could receive up to 25 years when they are sentenced March 12 and 13 next year.

It never ceases to amaze me how brazen some people can be in their fraudulent endeavors.  Did they really think having a room called the “Kickback Room” would never get discovered?  Of course, it did take $47 million worth of Medicare reimbursement before they were caught.

Source:  FBI — Two Brooklyn Clinic Employees Plead Guilty in Connection with $71 Million Medicare Fraud Scheme


WASHINGTON—Two Brooklyn, New York residents pleaded guilty today for their roles in a $71 million Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Acting Assistant Director in Charge Mary E. Galligan of the FBI’s New York Field Office; and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

Katherina Kostiochenko, 34, pleaded guilty today before U.S. District Judge Nina Gershon in the Eastern District of New York to one count of conspiracy to commit health care fraud, one count of health care fraud, and one count of conspiracy to pay kickbacks. Sergey V. Shelikhov, 51, pleaded guilty today before Judge Gershon to one count of conspiracy to commit health care fraud.

Co-conspirator Leonid Zheleznyakov, 28, pleaded guilty yesterday before Judge Gershon to one count of conspiracy to commit health care fraud for his role in the scheme.

Kostiochenko, Shelikhov, and Zheleznyakov were employees of a clinic in Brooklyn that operated under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC, and SZS Medical Care PLLC (Bay Medical clinic). According to court documents, owners, operators, and employees of the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $71 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy, and diagnostic tests.

According to the criminal complaint, the co-conspirators allegedly paid kickbacks to corrupt Medicare beneficiaries in a room at the clinic known as the “kickback room,” in which the conspirators paid approximately 1,000 kickbacks totaling more than $500,000 during a period of approximately six weeks from April to June 2010.

Kostiochenko, Shelikhov, and Zheleznyakov pleaded guilty to conspiring to commit health care fraud for their roles in the Bay Medical scheme. Kostiochenko also pleaded guilty to paying cash kickbacks to Medicare beneficiaries as part of the scheme.

At sentencing, Kostiochenko faces a maximum penalty of 25 years in prison, and Shelikhov and Zheleznyakov both face a maximum penalty of 10 years in prison. Kostiochenko and Zheleznyakov are scheduled for sentencing on March 12, 2013, and Shelikhov is scheduled for sentencing March 13, 2013.

In total, 16 individuals have been charged in the Bay Medical scheme, including two doctors, nine clinic owners/operators/employees, and five external money launderers. To date, 10 defendants have pleaded guilty for their roles in the conspiracy. Six individuals await trial before Judge Gershon on January 22, 2013.

The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to

Baylor University to pay $900K to settle Medicare fraud allegations

Baylor Medical Center

Baylor University will pay the federal government $900,000 to settle allegations of Medicare fraud related to radiation oncology services, including IMRT.  Baylor denies the allegations, and a statement from the university says it is paying to “avoid protracted and expensive litigation”.

Brian Berger, MD

The allegations against Baylor arose in a qui tam (whistleblower) suit filed by a former Baylor radiation oncologist, Dr. Brian Berger and a radiation therapist, Janice Delp.  Of note, the government elected to join the suit, which it does only in approximately 25% of qui tams.

According to The Dallas Morning News:

The government said Baylor University submitted the claims to Medicare from 2006 through May 2010. Federal authorities said Baylor double-billed Medicare for services related to radiation treatment plans; billed for more expensive radiation oncology services instead of cheaper services; billed for procedures without supporting documentation; and billed for radiation treatment without proof of physician supervision.

The issue of physician supervision was central to the whistle-blower suit, which accused Baylor of disregarding the “safety and well-being” of its cancer patients by failing to provide required physician supervision for complex and risky radiation treatments.

The suit said Baylor ignored safety concerns because of its desire for bigger profits. The lawsuit also said Berger and Delp took their concerns to Baylor executives, who ignored their warnings.

In addition to Medicare, Baylor reportedly filed false claims with the Civilian Health and Medical Program of the Uniformed Services (Tricare) and the Federal Employees Health Benefit Program.

[Read more…]

Dialysis company DaVita accused of $800 million Medicare fraud

DaVita, a Denver-based company that runs approximately 2,000 dialysis centers in the country, has been accused of a Medicare fraud scheme valued at up to $800 million related to administration and wastage of the drug Venofer.

The accusations come from Dr. Alon Vainer, the medical director of a Georgia dialysis center, and a nurse at the center, Daniel Barbir.  They allege in a whistleblower lawsuit that DaVita would charge Medicare for multiple vials of the drug Venofer (iron sucrose), when only one would have been necessary; the unused portions of the vials would simply be thrown away.

Once Dr. Vainer and Mr. Barbir figured out what was happening, they claim they took their concerns to the company and tried to get the waste and overbilling to stop.  When it did not stop, Mr. Barbir quit his job rather than continue the fraud.  Dr. Vainer claims DaVita did not renew his medical directorship or his practice as retribution, resulting in a significant loss of revenue.

Kent Thiry, DaVita CEO

DaVita denies the allegations.

CNN notes that if true, the fraud would be one of the largest in US history.

DaVita has revenues of around $7 billion per year and its CEO, Kent Thiry, was paid $17.5 million in 2011.

Interestingly, in July 2012, DaVita agreed to pay $55 million to the federal government to settle allegations related to its use of Epogen in dialysis patients.  From The Denver Post:

The Texas whistleblower lawsuit accused DaVita of using more Epogen than was medically necessary, and for double-billing the government for Epogen left over in vials and reused.  For the period covered by the lawsuit, the payment system rewarded dialysis companies by reimbursing for the amount of drugs used, critics have said.

Since the years when doctors and other critics raised questions about overuse of Epogen, Medicare has reversed the way it pays dialysis companies. It now bundles dialysis-related services and drugs into one set payment, with targets for red blood cell counts and other measures. The incentive is now to use less of the drugs, analysts have said.

We know about this qui tam (whistleblower) suit because it was recently unsealed.  Qui tams are sealed while the government investigates the claims, and so the general public is unaware the suit even exists during the investigation.  The case is unsealed when the government decides whether it will intervene or not.

The DOJ declined to intervene in this case.  This is not a surprise on its face; the DOJ only intervenes in about 25% of qui tams.  As I said in a previous post, when the government declines to intervene, it usually means the case has no merit.

In fact, DaVita is using the government’s decision not to intervene as a defense.  But the federal prosecutors who declined to intervene said their decision “should not be construed as a statement about the merits of the case.”

Pat Burns of the watchdog group Taxpayers Against Fraud says the DOJ simply doesn’t have enough people to prosecute cases.

The trial is scheduled for next year.

Source:  Dialysis company accused of giant Medicare fraud


It started with a chance conversation between a doctor and a nurse several years ago. But that brief encounter may end up exposing what could be one of the largest Medicare frauds in U.S. history.

Dr. Alon Vainer, a medical director at dialysis clinics in Georgia, was discussing clinic procedures with one of the nurses, Daniel Barbir. The two men say they saw something they believed was very wrong: expensive medicine, and lots of it, was being tossed in the trash. And the clinic workers were being told to do it, the two men say.

“When we sat down and started talking about it and getting into details, we actually realized exactly what was going on,” Vainer said.

The alleged waste was being carried out on a massive scale and, the nurse and the doctor said, they knew why almost immediately. They claim it was a way for their company, DaVita Inc., to defraud the government, overbill Medicare and Medicaid and make a fortune.

“We’re talking in the hundreds of millions, easily,” Vainer said. “The profit this company raked from those two schemes, only from those two drugs, was hundreds of millions of dollars.”

The allegations of massive fraud have implications for all Americans. The alleged fraud would have involved Medicare and Medicaid patients, whose medicine is paid for by U.S. taxpayers.

Vainer and Barbir said the alleged fraud schemes they discovered were going on at the company’s clinics all across the country — at the time, about 2003 through 2010, more than 1,800 — with tens of thousands of patients. It was enormous, they claim, and Vanier said it was all a deliberate strategy coordinated by the company.

“It was just a scheme in order to fraudulently increase and maximize and boost the Medicare revenue, Medicare payment, so therefore fraudulently increase their revenue,” he said.

DaVita Inc., based in downtown Denver, is one of the nation’s largest dialysis companies. The name means “Giving Life” in Italian. The company just moved into a brand new $101 million office tower, complete with fountains, gardens and even a suspended ski gondola inside for private meetings.

DaVita has grown in the past couple of years and now runs roughly 2,000 dialysis clinics across the country, which has added up to a $7 billion business. The dialysis empire is run by CEO Kent Thiry, who dresses like one of the Three Musketeers, has adopted a company slogan of ‘One for all and all for one’ and in company staff meetings leads his employees, who he calls villagers, in cheers of “DaVita!”

Thiry is reportedly paid an estimated $15 million a year, according to the Wall Street Journal, which has called him the best compensated CEO in Colorado.

Most of DaVita’s revenue comes from a single source: taxpayers. More than two-thirds of DaVita’s revenue comes from Medicare and Medicaid payments.

If Vainer and Barbir’s allegations are true, the company threw away hundreds of millions of dollars of medicine, and taxpayers paid for it. And, if true, the alleged fraud schemes could represent one of the largest Medicare frauds in U.S. history.

Vanier explained to CNN how DaVita instructed its nurses to administer a 100-milligram dose of the iron drug Venofor.

“For example, if a patient requires this dose once per week, you’d administer 100 milligrams, waste nothing and charge Medicare for 100 milligrams,” he said.

“But what DaVita did, instead of charge (for) one vial, they give 50 milligrams of this vial (and) put the residual into the trash.” he said. With another vial, he said, the company would give 25 milligrams to a patient and put the rest in the trash, then repeat it with yet another vial, when one vial could have been given without waste.

The more vials DaVita used, the more the company was able to bill the government, the men say. Vainer and Barbir claim they tried to call attention to the massive waste and tried to get it stopped. But instead, they say, they were basically told to stop causing trouble and to continue following the company’s protocols.

“That’s what upset me the most,” Barbir said. “and that’s when I went to Dr. Vainer. I said, ‘Dr. Vainer, I can’t do that.'”

Barbir says he quit his job and left the clinic rather than continue where fraud was going on. Vainer claims the company punished him for speaking up.

“Of course, once they found out, they did not renew my medical directorship or my practice,” Vainer claimed. “We are a three-physician practice, and it was a significant loss of revenue.”

Today, both men have filed a whistleblower lawsuit under the U.S. False Claims Act on behalf of the U.S. government, charging DaVita with massive Medicare fraud. They stand to make millions if DaVita is found guilty.

DaVita’s CEO wouldn’t talk, but the company’s attorney Kim Rivera did. When asked about the plaintiffs’ allegation that DaVita had come up with so-called schemes to throw away drugs and maximize profits, Rivera said: “Well that’s just wrong. If you look at the facts of the case, first of all, the doctors make the dosing decisions…. When you look at what the practices were — decisions being made by doctors, based on what was in the best interest of their patients. And they took into account a variety of things.

“You can’t just look at one issue. You have to look at things like infection control, what the patient’s going to do, how the patient’s going to do with particular doses. And so, during that entire time what we did, what the doctors did, was appropriate.”

But other companies, including DaVita’s main competitor, used smaller vials and smaller combinations at times, limiting what was thrown away.

DaVita reiterated its decisions to throw away medicine were for “sound clinical reasons” and “never to increase wastage.”

Plaintiffs’ attorneys Lin Wood and Marlan Wilbanks, who claim DaVita made as much as $800 million over-billing the government, say that DaVita’s defense won’t hold up in court.

“It’s not just the taxpayers that are the victims here, it’s the health care system,” Wood said.

“It doesn’t take a graduate degree to understand what’s going on here,” Wilbanks said. “This is just dishonesty.”

DaVita denies that and vows to fight the case in court. But earlier this year, while denying it did anything wrong, DaVita settled a similar case in Texas for $55 million.

Pat Burns, with the watchdog group “Taxpayers Against Fraud,” says the bigger problem is that even if a company gets caught cheating the government, the company executives never seem to face any punishment. Fines are paid and business continues as usual.

“The way it’s set up right now, if the fraud is not caught, then taxpayers foot the bill, Burns said. “If the fraud is caught, stockholders foot the bill.”

Burns and others have been arguing for much harsher treatment when companies are found guilty of defrauding the federal government. He points to record billion-dollar fines, particularly in the pharmaceutical business, that are paid, but executives don’t get punished and the companies continue to do business with the government.

In fact, one of DaVita’s defenses to CNN is that the federal government itself declined to charge the company with wrongdoing, even after reviewing the fraud allegations.

“The government has come in and thoroughly investigated what the allegations are, and in both cases the government decided to drop it and move on,” Rivera said.

Federal prosecutors in Georgia declined to intervene in the case but stated in a letter that decision “should not be construed as a statement about the merits of the case.”

The short-staffed U.S. Department of Justice declines to join lawsuits all the time, instead allowing private citizens who hire private lawyers to essentially prosecute for the government, Burns said.

“The U.S. Department of Justice simply doesn’t have the people,” Burns said. “It should have the people. I think we all would agree to that. It simply doesn’t.”

Which brings us back to the original meeting of one doctor and one nurse who now stand to make millions if these allegations of fraud are proven true.

The biggest winners, though, in their lawsuit could be taxpayers. The U.S. government will recover the bulk of whatever they win. They and others like them are essentially the U.S. taxpayers’ deputies in the fight against health care fraud. Asked if they are surprised that they have to defend the U.S. taxpayer, Barbir said simply, “I’m not surprised. It’s not easy to come forward and stand up and tell the truth, but it’s the right thing to do.”

The case is set for trial later next year.

Dr. Jonathan Agbeyiyi, gynecologist, gets five years for $6.7 million Medicare fraud

Dr. Jonathan Agbebiyi, a Detroit-area gynecologist, has been sentenced to five years in prison and $3 million restitution for a scam that involved billing Medicare approximately $6.7 million for unnecessary neurological tests administered by untrained personnel.  The Detroit Free Press article below says the scam was worth $5.4 million, but the FBI says it was $6.7 million.  I’m going with the FBI number on this one.

The articles I found simply said the neurological tests “…involved sending an electrical current through the arms and legs of the patients.”  I don’t know if the tests were EMGs or nerve conduction studies or something else.

The patients involved in the scam were not referred to Dr. Agbeyiyi; rather, he enticed patients to come to his clinics with cash, fast food and prescriptions for controlled substances, according to the FBI.

Paying patients to participate in health care fraud schemes is not unusual, unfortunately.  Mohammad Khan, a hospital administrator for Riverside Hospital in Houston TX, recently admitted he paid patients with food, coupons and cigarettes to enroll in a psychiatric program that billed Medicare

Dr. Agbeyiyi was found guilty by a federal jury on May 11, 2012.  By that time, nine people involved in the scam had been convicted.

I did a little looking around, and, according to the Federal Register, there is a Dr. Jonathan Agbeyiyi who lost his Arizona medical license in January 1994 and then subsequently lost his DEA license.  I have no way of knowing whether the two individuals are the same, but I would imagine there is a good chance they are.

Additionally, if he was enticing patients to come to his clinic with prescriptions for controlled substances, and the two Dr. Agbeyiyis are the same man, then he presumably got his DEA license back, or else he would have likely been prosecuted for prescribing narcotics without a license.

There is also a website for a Dr. Jonathan Agbeyiyi in Southfield, MI (a suburb of Detroit) that details his interests in holistic medicine.

Source:  Gynecologist sentenced to prison in $5.4M Medicare fraud scam | Macomb County | Detroit Free Press |


A gynecologist from Sterling Heights is going to prison for five years for his role in a $5.4-million Medicare fraud scheme that relied on recruiting patients with prescription bills, cash and fast food, and billing the government for neurological tests that were medically unnecessary.

In some cases, the tests involved sending electrical currents through the arms and legs of the recruited patients, who had no legitimate purpose for getting the tests, prosecutors said.

The physician, Jonathan Agbebiyi, 63, who worked at three Livonia clinics, also was ordered to pay nearly $3 million in restitution by U.S. District Judge Arthur Tarnow at his sentencing Tuesday. Following a lengthy FBI investigation, a federal jury convicted Agbebiyi in May of one count of conspiracy to commit health care fraud and six counts of health care fraud.

According to the U.S. Attorneys Office, between 2007 and 2010, Agbebiyi was a staff physician at three Livonia clinics: Blessed Medical Clinic, Alpha and Omega Medical Clinic and Manuel Medical Clinic.

According to evidence presented at trial, Agbebiyi billed Medicare for medically unnecessary diagnostic tests that were administered by unqualified and untrained clinic employees. The patients never received follow up treatment by neurologists, prosecutors said.

Evidence at trial also showed that the patients were not referred to the clinics by their primary care physicians – or for any other legitimate purpose – but rather were recruited with prescriptions for controlled substances, cash payments and fast food. The three clinics then billed the Medicare program for various diagnostic tests.

“This doctor exposed patients to electrical currents for neurological testing solely to generate money for himself at the expense of the Medicare program,” U.S. Attorney Barbara McQuade said. “We hope that cases like this one will deter other doctors from using patients as commodities for personal gain.”

Agbebiyi’s case was part of the federal government’s Medicare Fraud Strike Force operations, which have charged more than 1,330 defendants nationwide since 2007 with falsely billing Medicare for more than $4 billion.

Dr. Jacques Roy $375 million Medicare fraud trial delayed until June 2013

Dr. Jacques Roy

The trial of Dr. Jacques Roy, the Texas physician alleged to have committed $375 million worth of Medicare fraud, has been delayed until June 10, 2013.

According to the judge, both the prosecution and defense are in favor of the delay.  Dr. Roy’s attorney has stated as recently as last month he has not had sufficient time to examine all of the evidence in the case.

Source:  North Texas Medicare Fraud Trial Delayed « CBS Dallas / Fort Worth


DALLAS (AP) – A judge has delayed the trial for a Dallas-area doctor charged with running a massive Medicare and Medicaid fraud scheme until the middle of next year.

Judge Sam Lindsay’s order Wednesday sets trial for Dr. Jacques Roy for June 10, 2013. He says both prosecutors and attorneys for the defendants in the case support a delay.

Roy’s attorney, Ali Fazel, said last month that he has not yet been able to examine all of the evidence in the case.

Roy is accused of signing off on false paperwork in a scheme alleged to have reached more than $375 million.

One of his co-defendants, Cyprian Akamnonu has agreed to plead guilty.

Department of Justice charges 91 in $430 million Medicare fraud bust

On October 4, 2012, the United States Department of Justice (DOJ) announced that 91 health care practitioners in 7 cities across the country were arrested or surrendered in a sweeping takedown of Medicare fraud.

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering.   The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided.   In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided.

Among the more notable facts of the bust:

  • $230 million worth of home health fraud
  • $100 million worth of mental health fraud
  • $49 million worth of ambulance fraud, the largest ambulance fraud scheme ever prosecuted by the Medicare Fraud Strike Force
  • More than 30 practitioners were suspended from the Medicare program or had other administrative sanctions taken against them based on credible evidence of fraud
  • More than 500 members of law enforcement were involved

With respect to the mental health fraud-Earlier this year, Mohammad Khan, a hospital administrator at Riverside Hospital in Houston pled guilty to $116 million worth of Medicare fraud related to his hospital’s partial hospitalization program (PHP).

In his plea, Khan admitted that he paid and caused the payment of kickbacks to patient recruiters and owners of assisted living facilities and group care homes in exchange for the recruiters and owners sending Medicare beneficiaries to Riverside’s PHPs.  Khan also paid Medicare beneficiaries in the form of cigarettes, food and coupons redeemable for items available at Riverside’s “country stores,” in exchange for those beneficiaries attending Riverside’s PHPs.

In his plea, Khan admitted that he and his co-conspirators submitted approximately $116 million in claims to Medicare for PHP services purportedly provided by the hospital to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.

So at that hospital, patients would essentially be bribed to attend PHP, and then taxpayers would be billed for non-existent or unnecessary mental health services.

After that plea, the DOJ discovered an additional $42 million worth of fraud, which is included in today’s total.  In addition, 7 more people involved in that same scheme, presumably the co-conspirators mentioned above, were indicted with this most recent action.

It amazes me how ripe for fraud PHPs are.  Just in the last two months I have posted about three Florida psychiatrists being involved in PHP programs that allegedly defrauded Medicare of $255 million (links here and here).

Source:  Medicare Fraud Strike Force Charges 91 Individuals for Approximately $430 Million in False Billing


Medicare Fraud Strike Force operations in seven cities have led to charges against 91 individuals – including doctors, nurses and other licensed medical professionals – for their alleged participation in Medicare fraud schemes involving approximately $429.2 million in false billing, Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today.

Attorney General Holder and Secretary Sebelius were joined in the announcement of the nationwide takedown by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Associate Deputy Director Kevin Perkins, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Dr. Peter Budetti, Deputy Administrator for Program Integrity of the Centers for Medicare and Medicaid Services (CMS).

“Today’s enforcement actions reveal an alarming and unacceptable trend of individuals attempting to exploit federal health care programs to steal billions in taxpayer dollars for personal gain,” said Attorney General Holder.   “Such activities not only siphon precious taxpayer resources, drive up health care costs, and jeopardize the strength of the Medicare program – they also disproportionately victimize the most vulnerable members of society, including elderly, disabled and impoverished Americans.”

“Today’s arrests put criminals on notice that we are cracking down hard on people who want to steal from Medicare,” said HHS Secretary Sebelius.   “The health care law gives us new tools to better fight fraud and make Medicare stronger.   In addition to the arrests made today, HHS used new authority from the health care law to stop future payments to many of the health care providers suspected of fraud, saving Medicare resources and taxpayer dollars from being lost to fraud in the first place.”

Dozens of charged individuals were arrested or surrendered in the last 24 hours as indictments were unsealed across the country.   Together, those indictments charge more than $230 million in home health care fraud; more than $100 million in mental health care fraud and more than $49 million in ambulance transportation fraud; and millions more in other frauds.

HHS also suspended or took other administrative action against 30 health care providers following a data-driven analysis and based upon credible allegations of fraud.  Under the Affordable Care Act, HHS is able to suspend payments until the resolution of an investigation.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators and prosecutors designed to combat Medicare fraud through the use of Medicare data analysis techniques.   More than 500 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown.

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering.   The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided.   In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $429.2 million in fraudulent billing.

“Today’s coordinated actions represent one of the largest Medicare fraud takedowns in Department of Justice history, as measured by the amount of alleged fraudulent billings,” said Assistant Attorney General Breuer.   “We have made it one of the Department’s missions to hold accountable those who abuse the Medicare program for personal profit.   And there are Medicare fraudsters in prisons across the country – some who will be there for decades – who can attest to our determination, and our effectiveness.”

“Health care fraud leads to higher health care costs and makes quality care more difficult to obtain,” said FBI Associate Deputy Director Perkins. “Working together to stop fraud, as we did today, will ensure that Americans’ hard-earned dollars are used to care for the sick – not to line the pockets of criminals.”

“Today’s coordinated operation demonstrates that law enforcement is flexible enough to address health care fraud in its many evolving forms,” said HHS Inspector General Levinson.   “When home health agencies, durable medical equipment companies, pharmacies, or other health care providers are suspected of breaking the law, they can expect to be caught and held accountable.”

“This is the result of coordinated anti-fraud efforts – including Medicare flagging suspicious activity, efforts between agencies to investigate this criminal activity, and today’s actions by law enforcement and HHS,” said CMS Deputy Administrator for Program Integrity Budetti.   “As we stop payments to these providers suspected of fraud, we continue our efforts to move from a pay-and-chase model to one where we stop fraudsters before they can successfully bill Medicare and Medicaid.”

In Miami, a total of 33 defendants are charged for their alleged participation in various fraud schemes involving a total of $204.5 million in false billings for home health care, mental health services, occupational and physical therapy, and DME.   In one case, three defendants are charged for participating in a fraud scheme at LTC Professional Consultants and Professional Home Care Solutions Inc. which led to approximately $74 million in fraudulent billing for home health care.   In another case, five defendants are charged for participating in a fraud scheme at Hollywood Pavilion which led to $67 million in fraudulent billing for mental health services.

Sixteen individuals, including three doctors and one licensed physical therapist, are charged in Los Angeles with participating in various fraud schemes involving a total of $53.8 million in false billings.   In one case, four defendants are charged for allegedly participating in a fraud scheme at Alpha Ambulance Inc., which led to approximately $49.2 million in fraudulent billing for ambulance transportation.   The case represents the largest ambulance fraud scheme ever prosecuted by the Medicare Fraud Strike Force.   According to court documents, the defendants provided beneficiaries ambulance rides that were medically unnecessary.

In Dallas, 14 individuals – including two doctors and two registered nurses – are charged for their alleged participation in various fraud schemes involving a total of $103.3 million in false billings.   In one case, three defendants – a medical doctor and two registered nurses – are charged with participating in a fraud scheme at Raphem Medical Practice and PTM Healthcare Services which led to approximately $100 million in fraudulent billing for home health care services.  According to court documents, Dr. Joseph Megwa signed approximately 33,000 prescriptions for more than 2,000 unique Medicare beneficiaries from 2006 to 2011.   Many of these Medicare beneficiaries had primary care physicians who never certified home healthcare services for them.   In order to handle the volume of prescriptions, Megwa allegedly signed stacks of documents without reviewing them.

Seven individuals are charged in Houston for their participation in a fraud scheme at a hospital which led to $158 million in fraudulent billing for community mental health center services.   According to court documents, the defendants who served as administrators at the hospital paid kickbacks – in the form of cigarettes, food and coupons redeemable for items available at the hospital’s “country stores” – to Medicare beneficiaries in exchange for those beneficiaries’ attendance at the hospital’s partial hospitalization programs (PHP).   Allegedly, beneficiaries watched television, played games and engaged in other non-PHP activities rather than receiving the services for which the hospital billed Medicare.   Previously, on Feb. 22, 2012, the assistant administrator of the hospital, Mohammad Kahn, pleaded guilty to conspiracy to commit health care fraud and paying kickbacks related to $116 million worth of fraudulent claims submitted to Medicare.   After his guilty plea, an additional $42 million in fraudulent claims were discovered that are included in today’s totals.

In Brooklyn, 15 individuals, including one doctor and four chiropractors, are charged for their alleged participation in various fraud schemes involving a total of $23.2 million in false billings.   In one case, nine defendants, including a medical doctor, are charged with participating in a fraud scheme at Cropsey Medical Care PLLC which led to approximately $13.8 million in fraudulent billing for physical therapy and related services. According to court documents, the defendants paid cash kickbacks to Medicare beneficiaries in exchange for physical therapy that was not medically necessary and on some occasions never provided to beneficiaries.

In Baton Rouge, four defendants, including a licensed practical nurse, are charged for their roles in fraud schemes involving approximately $2.4 million in false claims for medically unnecessary durable medical equipment.

In Chicago, two defendants, including a dermatologist and a psychologist, are charged for their roles in fraud schemes involving, according to court documents, millions of dollars in false claims for medically unnecessary laser treatments and psychotherapy services.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, strike force operations in nine locations have charged more than 1,480 defendants who collectively have falsely billed the Medicare program for more than $4.8 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprising attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorneys’ Offices for the Southern District of Florida, the Southern District of Texas, the Northern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois, and the Eastern District of New York, and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units, with assistance from the Justice Department’s Civil Division and the IRS.

The charges and allegations contained in the indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.

To learn more about HEAT, go to:

Two psychiatrists sentenced to 10 years and huge restitution for roles in $205 million Medicare fraud


Drs. Mark Willner and Alberto Ayala, of Coral Gables Florida, have been sentenced to 10 years in prison and ordered to repay $57 million and $87 million, respectively, to Medicare for their roles in a Medicare fraud scheme valued at $205 million.

How much were the good doctors paid for their roles?  Dr. Willner was allegedly paid $641,000 and Dr. Ayala $536,000.

What makes this case even more interesting is that three executives of the company where Drs. Willner and Ayala were medical directors, American Therapeutics Corporation (ATC), received prison sentences of 50, 35 and 35 years.  According to the Department of Justice:

In 2011, ATC executives Lawrence Duran, Marianella Valera and Judith Negron, were sentenced to 50 years, 35 years and 35 years, respectively, for their roles in the scheme.  These sentences are the three longest prison sentences ever imposed in a Medicare Fraud Strike Force case.

Drs. Willner and Ayala were found guilty on June 1, 2012, but were not sentenced until October 1.  Again from the Department of Justice:

Dr. Mark Willner, Dr. Alberto Ayala and therapist Vanja Abreu (Ph.D.) were each found guilty of one count of conspiracy to commit health care fraud.  Willner was acquitted of five other counts of health care fraud and Ayala was acquitted of two other counts of health care fraud.

Evidence at trial demonstrated that the defendants and their co-conspirators caused the submission of false and fraudulent claims to Medicare through ATC, a Florida corporation headquartered in Miami that operated purported partial hospitalization programs (PHPs) in seven different locations throughout South Florida and Orlando.

ATC billed Medicare for hundreds of millions of dollars in false and fictitious services, for thousands of patients who were not qualified, based on fraudulent documents created by Abreu and others and bogus certifications signed by Willner and Ayala.

Evidence further revealed that doctors at ATC, including Willner and Ayala, signed patient files without reading them or seeing the patients.  Specifically, evidence was presented that Willner and Ayala would “robo-sign” patient files, meaning they would sign patient documents without having seen or treated the patients.  The evidence also showed that Ayala signed files for services allegedly rendered during time periods when he was out of the country on vacation.  Evidence further revealed that ATC then billed Medicare for more than $100 million in PHP treatment for these patients under the names of Willner and Ayala.

PHP is a form of intense treatment for severe mental health issues.

Readers will recall the story of Dr. Gary Kushner, another Florida psychiatrist, who was recently convicted of Medicare fraud for his role in a scheme involving the submission of $50 million of false and fraudulent claims.  The scheme also involved billing Medicare for PHP services that were inappropriate and in some cases never performed.

This case again highlights the fact that often a tremendous amount of fraud occurs before the federal government picks up on it, which I find frustrating.  I applaud the fact that the perpetrators were eventually caught, but I wish it had been sooner.

And remember, Dr. Jacques Roy allegedly defrauded Medicare to the tune of $375 million before he was arrested.

So between just those two cases, Medicare was defrauded of over half a billion dollars before arrests were made.


Source:  Two South Florida doctors sent to prison for 10 years in major Medicare scam – Miami-Dade –


Two South Florida doctors convicted of conspiring to defraud Medicare through the nation’s largest mental-health racket were each sentenced to 10 years in prison Monday.

A federal jury in June convicted psychiatrists Mark Willner, 56, of Weston and Alberto Ayala, 68, of Coral Gables, the medical directors for American Therapeutic Corp., for their roles in a $205 million scheme to fleece the taxpayer-funded program for the elderly and disabled.

The 12-person jury found them not guilty on other healthcare fraud offenses.

U.S. District Judge Patricia Seitz gave the two doctors the maximum prison sentence for their cruicial roles in the criminal conspiracy, and then ordered Willner to pay $57 million and Ayala $87 million to Medicare.

Justice Department prosecutors said the doctors prescribed $120 million worth of fraudulent psychotherapy sessions at ATC’s chain of clinics in Miami-Dade and Broward counties. Willner and Ayala were paid $641,000 and $536,000, respectively, for their services, according to trial evidence.

Since Miami-based ATC’s chain was shuttered two years ago, 35 defendants have been charged in the case with the majority pleading guilty. The ringleader, business owner Lawrence Duran, received a 50-year prison sentence — the stiffest punishment ever for a Medicare fraud offender.

Texas Vascular Associates denies health care fraud allegations


Texas Vascular Associates physicians

Not surprisingly, Texas Vascular Associates is publicly denying the health care fraud allegations made by one of their former employees that I talked about yesterday.


DALLAS, July 27, 2012 /PRNewswire/ — Texas Vascular Associates, PA, the premier vascular surgical group in the state of Texas, will aggressively fight false charges from a former employee who has accused the group and its doctors of Medicare and insurance fraud.  Cortez Mills, who worked for Texas Vascular for two years before being terminated for cause, filed a lawsuit on July 26, 2012.

“The allegations are outrageous and completely false, and we look forward to proving that in court.  We have not committed any illegal acts or Medicare fraud,” said Dr. Bertram Smith, president of Texas Vascular Associates, PA.  “Ms. Mills is a disgruntled former employee who was terminated for cause.  She was not fired because she uncovered fraudulent billing practices at our offices.  She was fired because of ongoing inappropriate and abusive conduct toward her supervisor and fellow employees.”

Ms. Mills was denied unemployment benefits in a decision upheld in June 2012 by the Texas Workforce Commission because she had been terminated for just cause.  The Texas Workforce Commission found that Ms. Mills had been warned several times that the abusive manner with which she treated other employees was unacceptable.

“The allegations have no basis in the facts or the law.  Terminated employees often try to justify their own personal failings or otherwise grind an ax at the courthouse or in the media.  Here, Ms. Mills has doubled down with a legal filing and a media blitz.  Neither effort will succeed,” said Thomas Melsheimer, a principal in the Dallas office of Fish & Richardson who is representing Texas Vascular along with Fish principal Steve Stodghill.

Mr. Melsheimer, who was an Assistant U.S. Attorney for the Northern District of Texas from 1990 to 1993, recently obtained a record-setting $158 million settlement from Johnson & Johnson and its Janssen division – the largest Medicaid fraud recovery in Texas history – in conjunction with the Texas Attorney General Greg Abbott.  Mr. Melsheimer brought the qui tam lawsuit on behalf of a whistleblower.

It’s important to note that Ms. Mills is not a whistleblower and this is not a health care fraud case.  Ms. Mills has two limited employment claims, the factual basis of which has been rejected twice by the Texas Workforce Commission.  In legitimate cases of wrongdoing, the law provides a method for fraud cases to be reported and investigated confidentially.

“Ms. Mills didn’t choose a legitimate route to report her ridiculous allegations of fraud for good reason – her claims are bogus.  She seeks personal gain and attention through a public lawsuit and is using the media in an attempt to tarnish her former employer,” added Mr. Melsheimer.  “Texas Vascular will unequivocally defend its good name within the Dallas medical community and among the thousands of patients it has successfully treated over the years.  When this is over, we expect our client to be completely vindicated of all charges.”

SOURCE Texas Vascular Associates

via Texas Vascular Associates Vigorously Denies Allegations of Medicare and Insurance Fraud — DALLAS, July 27, 2012 /PRNewswire/ —


Former federal judge accuses nine Dallas doctors of ‘massive’ health care fraud

Texas Vascular Associates physicians

Joe Kendall, a former federal judge appointed by George HW Bush, is representing a former employee of Texas Vascular Associates (TVA) in Dallas who accuses the doctors there of firing her because she refused to be a party to health care fraud.

Normally I would not write about a case that is only in the allegation phase, but TVA has reportedly already reimbursed Medicare $2.4 million as of May 2012, meaning there very well could be some wrong-doing going on.

The term “drive-by-billing” is used in the plaintiff’s petition linked to below; I had not heard that term before.  Drive-by billing is when a doctor charges a patient for a service even though he/she is merely watching another doctor do the work.

The first two lines in the section about drive-by billing says, “Obviously, for a physician to bill for services, the physician must actually render services.  Yet Defendants actually billed for services never performed.”

Drive-by billing sounds awfully similar to “client billing” and “in-office laboratory billing”, except in drive-by billing, the profiting physician actually makes the effort to observe the work being done and has the requisite training to perform it.  It is a lot closer to legitimacy than what happens with pathology services.

Judge Kendall reportedly has a sworn statement from another woman who used to work at TVA and makes similar allegations.

Here are some of the allegations I found interesting within the plaintiff petition:

-One of the docs did not have a Medicare number when he started seeing Medicare patients; TVA would use the Medicare number of another physician who had not actually seen the patient to bill for his work

-At least one employee who went along with the fraudulent billing was promoted

-Docs would occasionally bill two different insurance companies for the same service

-The doctors routinely balance billed Medicaid patients and sent collection agencies after the patients who they were unable to pay

-One of the docs routinely added a modifier for a more complicated procedure because he “felt” he had worked harder even though there was no corresponding medical record

-TVA and several docs would routinely bill for post-operative follow up office visits during the period of time when they are specifically prohibited from billing for these visits

-Several docs would routinely upcode for office visits

-Physicians would often watch procedures in the Baylor cath lab but bill as if they actually performed the procedure

-Physicians would routinely bill Medicare in advance for services

It will be interesting to watch this case progress.  It is entirely possible we are only seeing the tip of the iceberg with respect to the amount of money they fraudulently charged.  If her allegations are true, that is.


Source: Former judge accuses 9 Dallas doctors of ‘massive’ fraud | Investigates Blog

A group of Dallas surgeons fired one of their billing experts because she refused to aid them in a “massive and pervasive health-care fraud scheme,” according to a lawsuit filed this morning.

Cortez Mills is suing Texas Vascular Associates and its nine doctors, saying they pressured her to commit “criminally illegal acts” against patients, insurance companies and Medicare, the federal insurance program for seniors. Among the alleged practices: double billing (charging two insurers for the same thing), “upcoding” (charging for a more expensive service than is performed), “balance billing” (charging patients for the difference between what doctors want and what’s allowed by Medicaid, the federal-state insurance program for the poor), and “drive-by billing” (charging patients when a doctor merely watches another doctor work).

Mills says that when she balked, doctors cursed at her and found other employees who followed orders.

Texas Vascular Associates declined to comment this morning. The group is based in the Baylor Hamilton Heart and Vascular Hospital, on the Baylor Dallas campus near downtown. Its doctors are all on the medical staff of Baylor Health Care System hospitals.

The lawsuit, filed in Dallas County court, does not accuse any Baylor entities of wrongdoing. It seeks back pay, compensatory and punitive damages.

Mills is represented by the Dallas law office of Joe Kendall, a former federal and state judge. He was appointed to the federal bench by President George H.W. Bush, and later to the U.S. Sentencing Commission by President Bill Clinton.

Kendall told me that Mills passed a lie-detector test before he agreed to pursue the litigation. He said he is communicating with the FBI and the U.S. Attorney’s Office about the case.

His office has obtained a sworn statement from one of Mills’ former co-workers, Desire Bell, that makes similar allegations against Texas Vascular Associates. She left the office last summer after working there less than a year.

“I was so concerned with the actions of TVA that I reported their billing practices to Medicare and told Medicare that they should investigate,” Bell’s affidavit says. “I do not know if Medicare took any action.”

Mills later also called in a report to the U.S. Centers for Medicare & Medicaid Services, Kendall said. She told her lawyer that by the time of her May 2012 firing, CMS had recouped about $2.4 million in overcharges from Texas Vascular.

“If forced to refund money to Medicare,” the lawsuit says, the defendants “readily acknowledged that they had had the free use of the government’s money and earned interest on it.”

Bob Moos, spokesman for the Dallas office of CMS, could not be reached for comment this morning.

Kendall’s legal strategy differs from one used in two other recent Medicare fraud cases that also started with local insiders’ complaints. Those cases, targeting UT Southwestern Medical Center doctors and Parkland Memorial Hospital, were filed by doctors on behalf of the federal government. They remained under seal for years while the U.S. Justice Department investigated.

The department intervened in the case filed by Dr. Larry Gentilello, a former UTSW trauma surgeon, and last year obtained a $1.4 million settlement. Gentilello received $200,000 of that amount. The other case was filed by Dr. Lien Kyri, who participated in UTSW’s physical medicine and rehabilitation residency training program at Parkland. It is pending.

Kendall said his client doesn’t have the resources to wait on the Justice Department. “We’re going to hop on it,” he said.

Government and private insurers team up to fight health care fraud

Well it’s about time.

The Obama administration has just announced a partnership with numerous private insurance companies to combat health care fraud.  According to the Associated Press, this effort will be “on a scale not previously seen”.

Until now, health care fraudsters have been able to take advantage of the fact that the US has a public/private hybrid for financing health care, because information about suspicious activity was not shared.  Hopefully this will now change.

Many of the details remain to be worked out, but someone close to the discussions say the two sides are hoping for “tangible results” within six months to a year.

This announcement is also interesting because of the strained relationship that developed between the Obama administration and the America’s Health Insurance Plans (AHIP), the trade organization that represents the health insurance industry, during the health care reform debate a few years ago.  On the one hand, AHIP bristled at the bill because it would dictate how insurance companies could conduct business, but on the other hand, it welcomed the opportunity to get 30 million more Americans on the health insurance rolls.

Thankfully, both sides were able to come together to find a common foe in health care fraud.

As I wrote about before, Medicare fraud costs about $60 billion per year and in 2011, the Obama administration recovered about $4 billion, which was an all-time record.  Obviously some is better than none, but that is still a very small fraction of the total fraud perpetrated.

There will obviously be bumps along the way with the implementation of this program but I remain cautiously optimistic that this endeavor will bear fruit.

Only time will tell.


Source:  US stepping up fight against health care fraud | Minnesota Public Radio News


WASHINGTON (AP) — The Obama administration is upping the ante in the fight against health care fraud, joining forces with private insurers and state investigators on a scale not previously seen in an attempt to stanch tens of billions of dollars in losses.

Announcing the new public-private partnership Thursday, Health and Human Services Secretary Kathleen Sebelius said it “puts criminals on notice that we will find them and stop them.”

Fraud is an endemic problem plaguing entitlement programs like Medicare and Medicaid as well as private insurance companies. Sebelius said the new program will collate claims data from all those programs and mine it for signs of bogus billing.

“Lots of the fraudsters have used our fragmented health care system to their advantage,” Sebelius told reporters during a White House meeting with insurance executives. “By sharing information across payers, we can bring this potentially fraudulent activity to light so it can be stopped.”

The agreement is also unusual because it brings the Obama administration and longtime foes in the insurance industry together to tackle a common problem. While carrying out the requirements of President Barack Obama’s health care overhaul law, insurers are also lobbying to roll back some of its provisions, such as new taxes on the industry and cuts to private plans offered through Medicare. Obama continues to rail against industry “abuses.”

But industry leaders stressed that combating fraud is in everyone’s interests.

“It’s just gotten a great deal harder to prey upon the public,” said Karen Ignani, CEO of America’s Health Insurance Plans, one of a number of industry groups backing the partnership.

Attorney General Eric Holder, who took part in the announcement, said industry and government will “come together as never before to share information while protecting patient confidentiality.”

Details of the collaboration remain to be worked out, but the possibilities include sharing information on new fraud schemes as they pop up; using claims data to catch scams such as payments billed to different insurers on the same day for care purportedly delivered to the same patient in different cities; and using computer analysis to spot emerging patterns of fraud.

An industry official familiar with the discussions said the partnership aims to produce tangible results within six months to a year, but that some issues — including extensive sharing of claims data — will take longer to work out. Initially, the collaboration will involve sharing of such information as billing codes associated with fraud for different insurers.

“This is about getting stuff done, not about holding meetings,” said the official, who declined to be identified because he was not authorized to discuss the subject in public and spoke on condition he not be named.

Fraud is estimated to cost Medicare about $60 billion a year, and the Obama administration has beefed up the government’s efforts to stop it, bringing in record settlements with drug companies for marketing violations as well as using new powers in the health care law to pursue low-level fraudsters with greater zeal.

Yet, although Medicare is becoming a harder target, it’s too early to say if the tide has turned.

Some antifraud efforts launched with great fanfare have yet to deliver convincing results. For example, a $77 million computer system unveiled last summer to stop Medicare fraud before it happens had prevented just one suspicious payment by Christmas.

Likewise, the new public-private collaboration could face problems. Privacy advocates may object to extensive scrutiny of claims data, and doctors have traditionally pushed back against routine computerized monitoring of their practice patterns.

Supporting the partnership are America’s Health Insurance Plans, the leading industry lobbying group, the Blue Cross and Blue Shield Association, and major companies including UnitedHealth Group and WellPoint, Inc. Formal working meetings are scheduled for September.

“The cost of fraud can far exceed what is paid for in falsified claims,” said Ignagni, the industry’s top lobbyist. “It can cause real harm to patients who are intentionally exposed to radiation, invasive surgeries and medication they do not need, or suffer the consequences of receiving a fraudulent diagnosis.”

The analysis of data from Medicare, Medicaid and private health plans will look for suspicious patterns and other evidence that might indicate fraud, White House officials said. A “trusted third party” would comb through the data and turn questionable billing over to insurers or federal investigators.

Officials said those who submit fraudulent claims often do so for both government programs and private insurance plans. Separately, such claims might not raise suspicions, but taken together they could raise a red flag, such as when a doctor bills for more than 24 hours in a day.

Law enforcement organizations taking part in the collaboration include the FBI, the Health and Human Services Inspector General’s Office, the Justice Department, and state and private insurance fraud control units.