24 people charged in $1.2 billion Medicare brace scam

Federal authorities announced Tuesday that a $1.2 billion Medicare scam that targeted hundreds of thousands of senior citizens across the country has been busted.

The Justice Department said 24 people have been charged in connection with the scam, including doctors who wrote fake prescriptions for orthopedic braces. Described as being one of the biggest frauds the Health and Human Services inspector general's office has ever seen, the scam revolved around overseas call centers.

Telemarketers in the Philippines and Latin America would call seniors and tell them they were eligible for free orthopedic braces, The Associated Press reports. After verifying they had Medicare, the telemarketer then transferred the person to a telemedicine company, where a doctor would write a prescription over the phone, regardless of whether the person needed one or not.

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The prescriptions were then sent to medical equipment companies, who mailed the braces to the recipients and collected $500 to $900 per brace from Medicare. These companies would then pay kickbacks of $300 per brace. Authorities said the money was laundered through offshore shell companies, and used to buy luxury homes and cars. They learned about the scam last summer, and while $1.7 billion was fraudulently billed, only about $1.2 billion was paid. In addition to the 24 people charged, Medicare plans on taking action against 130 medical equipment companies accused of participating in the scam, AP reports.