Dozens Arrested in Huge Medicaid Fraud Scheme

Federal, state and local law enforcement agents and investigators are working together to crack down on fraud in government healthcare programs. An investigation by the FBI’s Health Care Fraud Task Force led to the recent arrest of dozens of people allegedly involved in a plot to buy prescription drugs from Medicaid recipients and sell them at a much higher price to pharmacies.

The scheme ran for seven years and, the FBI charged, cost Medicaid $500 million. According to the FBI, the scammers targeted expensive medications, such as drugs used to treat HIV or schizophrenia that cost more than $1,000 per bottle. “Collectors” allegedly bought the drugs from Medicaid recipients, who had received the drugs for free or at a very low cost. The transactions took place on New York City street corners or in bodegas. The drugs were then repackaged and sold and resold up through a chain of buyers until eventually they were sold to wholesale prescription drug distributors, which sold them to pharmacies.

In addition to the FBI, a dizzying array of agencies also contribute to the work of the New York FBI Health Care Task Force, including the federal Department of Labor, Office of Personnel Management, and Food and Drug Administration; the New York State Insurance Fraud Bureau, the Attorney General, the Medicaid Inspector General, the Health and Hospitals Inspector General; the New York City Police Department and the National Insurance Crime Bureau.

With the heightened scrutiny on potential healthcare fraud, it’s more important than ever for employees to receive training in healthcare fraud and abuse that will teach them to recognize and understand the most important real-world compliance issues.