W. Rick Copeland, director of the Medical Fraud Control Unit of the Office… (LM Otero, Associated Press )
Reporting from Washington — Federal law enforcement officials announced charges in the largest healthcare fraud scam in the nation's history, indicting a Dallas-area physician for purportedly bilking Medicare of nearly $375 million after he reportedly sent out "recruiters" to round up patients and get them to sign for treatments he never provided.
The Medicare billings piled up by Dr. Jacques Roy grew so large over the last five years that the situation left outside experts wondering Tuesday why it took prosecutors so long to notice.
"To get that kind of money, you'd need to be treating a million people," said Andrew Selesnick, a Los Angeles lawyer who represents physicians. "You'd have to have 30 locations and tons of people going through them."
The arrest of the Canadian-born doctor, a physician for nearly 30 years, comes at a time when healthcare fraud is sharply increasing, with fewer people able to afford doctor visits and Medicare and other government programs paying less in reimbursements.
That phenomenon has prompted more healthcare providers to cut corners, with more doctors and clinicians looking for new ways to pay off expensive student loans and medical equipment, or just keep afloat in an industry that is burdened with high insurance and other costs.
Atty. Gen. Eric H. Holder Jr., in testimony Tuesday before a House Appropriations subcommittee, said federal prosecutors were fighting back. In the last fiscal year they recovered nearly $4.1 billion in funds "stolen or taken improperly from federal healthcare programs," he said. "This represents the highest amount ever recovered in a single year."
At the same time, Holder said, the Justice Department opened 1,100 new criminal healthcare fraud investigations, won more than 700 convictions, and initiated 1,000 civil healthcare fraud investigations.
In all, he said, for every dollar spent fighting healthcare fraud, "we've been able to return an average of $7 to the U.S. Treasury, the Medicare Trust Fund" and other government entities.
Roy, 54, was arrested Tuesday at his Rockwall, Texas, home, where authorities found bank statements from the Cayman Islands, a fake Texas driver's license, and passport photos of him with and without glasses and wearing different outfits. In one room was a book titled "Hide Your A$$ET$ and Disappear."
Taken before a federal judge in Dallas and ordered held, Roy faces a maximum sentence of 100 years in prison and at least $18.5 million in fines and forfeitures.
"Dr. Roy engaged in a staggering and long-running fraud scheme," prosecutors said in asking that he not be allowed bail. "He will flout any authority that tries to rein him in."
Authorities allege that Roy and his office manager in DeSoto, Texas, Teri Sivils, who was also charged, sent the healthcare recruiters door-to-door asking residents to sign forms that contained the doctor's electronic signature and stated that his practice had seen them professionally in their own homes.
They also allegedly dispatched more recruiters to a homeless shelter in Dallas, paying them $50 every time they coaxed a street person to go to a nearby parking lot and sign the bogus forms.
The long-running ruse began in the Dallas-Fort Worth area in 2006, and over the last five years collected more Medicare beneficiaries than any other medical practice in the United States.
Also charged were five owners of home health agencies. Health and Human Services Department officials suspended payments worth about $2.3 million a month to 78 other Texas home health agencies.
Daniel R. Levinson, inspector general for the Health and Human Services Department, said authorities were applying new investigative tools to target fraud schemes. "Using sophisticated data analysis, we can now target suspicious billing spikes," he said.
In the Roy case, Levinson noted that "our analysts discovered that in 2010, while 99% of physicians who certified patients for home health signed off on 104 or fewer people, Dr. Roy certified more than 5,000."
Justice Department officials, reacting to questions about how the fraudulent scheme had been allowed to grow so large, said the case's size made it a burdensome, complex and protracted investigation. Even when officials suspended Roy's Medicare license in June, they said, he found a way around that by shifting his business to another company.
"As enforcement actions have ramped up, fraudsters are devising new ways to beat the system," said Sarah R. Saldana, the U.S. attorney in Dallas.
Jack Fernandez, a Florida lawyer who formerly prosecuted healthcare fraud for the federal government, whistled out loud when he heard the dollar amount in the Roy case. But he said the red tape and complex laws and regulations that come with filing Medicare claims made it easy to slip false claims through the system.
"It's easy for someone to run around those statutes," he said. "But the government is going to get its money back."