The Justice Department has charged 15 defendants, including six medical professionals, in a series of alleged healthcare fraud schemes involving about $2 billion in fraudulent claims to government commercial payers combined.
The charges, announced by the U.S. Attorney’s Office for the Central District of California, involve alleged fraudulent substance abuse treatment, medically unnecessary vascular procedures, hospice services, genetic testing and prescription drugs.
Eight defendants were arrested Oct. 22. The cases include what federal prosecutors described as the largest substance abuse treatment fraud scheme ever prosecuted by the Justice Department.
Seven things to know:
1. The largest alleged scheme involved $1.6 billion in substance abuse treatment claims. Four defendants were charged with recruiting vulnerable individuals from across the country and transporting them to purported addiction treatment facilities in Southern California and elsewhere. Prosecutors allege the defendants offered free flights, housing, money and drugs to attract patients with high-reimbursing insurance policies. Patients were allegedly cycled through treatment facilities regardless of medical necessity, while some were prevented from leaving or given drugs to keep them enrolled. A fifth defendant, who managed some of the facilities, pleaded guilty to conspiracy to commit healthcare fraud and wire fraud in connection with the scheme.
2. A surgeon and chiropractor were charged in a $135 million Medicare fraud scheme. Harold Tabaie, MD, a cardiothoracic surgeon in Anaheim, Calif., and Hany Malek, DC, a chiropractor in Tarzana, Calif., allegedly billed Medicare for medically unnecessary atherectomies performed at two Los Angeles clinics. Prosecutors allege Mr. Malek posed as a physician and recommended the invasive procedures to patients who did not have arterial disease. Dr. Tabaie allegedly performed the procedures, some of which caused patients significant pain and discomfort. Investigators identified the case through data analytics that flagged Dr. Tabaie’s unusually high volume of atherectomy billing.
3. Three hospice fraud cases involved more than $138 million in alleged fraudulent claims. Prosecutors charged three defendants in separate schemes involving Medicare beneficiaries who were not terminally ill. Geoffrey Jimenez, allegedly operated hospice companies that enrolled ineligible beneficiaries and billed Medicare for unnecessary or unprovided care. Richard Keech, MD, allegedly signed false terminal illness certifications for patients who had not elected hospice care. Armani Raffi, was charged with operating four interconnected hospice agencies that allegedly used falsified records, kickbacks and patient transfers to generate fraudulent claims.
4. Two physicians were charged in genetic testing kickback schemes. Hassan Badday, MD, and Robby Ayoub, MD, allegedly accepted illegal payments in exchange for authorizing medically unnecessary genetic tests. Prosecutors allege the physicians allowed a marketer representing Houston-based laboratory ApolloMDx to obtain DNA samples from Medicare beneficiaries. The resulting testing orders generated more than $5.5 million in combined claims to federal healthcare programs, according to the indictments.
5. A nearly $270 million Medi-Cal pharmacy fraud case was also included. Christina Mareik, of Whittier, Calif., was indicted for her alleged role in a scheme that exploited a temporary suspension of prior authorization requirements under California’s Medicaid prescription drug program. Prosecutors allege the scheme involved thousands of fraudulent prescriptions for medically unnecessary medications submitted through Monte Vista Pharmacy. Medi-Cal paid about $179 million of the $269 million in allegedly fraudulent claims. Ms. Mareik was previously charged by criminal complaint in June, according to the Justice Department.
6. Other charges involved patient referral kickbacks and prescription drug samples. Thomas Mladinich, of Newport Beach, Calif., was charged in connection with illegal kickbacks for referring patients to an addiction treatment facility. According to prosecutors, he received between $150,000 and $250,000 in referral payments. In a separate case, Dejun Wang, MD, of Walnut, Calif., was charged with unlawfully selling prescription drug samples, including Ozempic, Mounjaro and Rybelsus, to pharmacies that allegedly repackaged and dispensed them.
7. Federal officials emphasized data analytics and coordinated enforcement. The cases involved investigations by the FBI, HHS Office of Inspector General, Drug Enforcement Administration, IRS Criminal Investigation and other agencies. Colin McDonald, assistant attorney general of the Justice Department’s National Fraud Enforcement Division, highlighted investigators’ use of data analytics to uncover suspicious billing patterns.
The charges are allegations, and defendants who have not pleaded guilty are presumed innocent unless proven guilty in court.
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