Investigators describe it as a multi-billion-dollar fraud scheme targeting people who rely on Medicare services.
A recorded phone call provided to NBC6 by federal investigators shows how criminals are targeting seniors from our own backyard.
In the recording, which was used as evidence in a criminal case, an 84-year-old man receives a phone call from someone who identifies herself as working with “lab services.” She asked if he received a FedEx package that was previously sent to him.
“I didn’t order it, but I got it,” the man responds.
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Investigators of the U.S. The Department of Health and Human Services Office of Inspector General (HHS-OIG) say the call was actually a telemarketer, trying to convince the man to take a genetic test for heart issues.
“I’m a genetics advocate here,” she continues. “My job is just to help walk you through taking that test.”
The man responds, “No, it’s another CMS scam is what it is, so they can make money. And that’s why Medicare is in such a damn bad shape as it is!”
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As the man suspects, that call has nothing to do with the Centers for Medicare and Medicaid Services, or CMS as he calls it.
Investigators say it came from a call center tucked away inside an office building in Boca Raton.
“So, the way this center worked was they would contact beneficiaries or Medicare enrollees and convince them to get a genetic test for cardiac or a cancer genetic test all from through the call center here,” explained Stephen Mahmood, Assistant Special Agent in Charge for the Miami office of the U.S. Department of Health and Human Services Office of Inspector General.
In the phone call, the Medicare recipient is heard arguing against taking the genetic test until a man, who describes himself as a supervisor, gets on the phone and tries to convince him why he needs it.
“To identify if you are in a high-risk category for certain illnesses such as … heart attack, stroke, coronary artery disease,” the caller can be heard saying.
The man replies, “Well at 84 years old, I’m probably a candidate for all of those, wouldn’t you say?”
Mahmood drove us along a stretch of U.S. 1 in Boca Raton and said most of the call centers involved in this sort of telemarketing fraud are located here in South Florida.
“They’re all over the place,” he said.
He says the scheme starts when telemarketing companies contact Medicare recipients—using illegally obtained personal data.
“They may say ‘I’m with Medicare. You have this benefit, or you need to take advantage of this benefit,’” he added.
Then they get doctors or other providers to sign off on the unnecessary genetic testing, usually for cancer or heart conditions. A shell lab then bills Medicare for the worthless test, and everyone involved will get a cut.
“The money kind of flows down. The lab owner profits from it,” Mahmood said. “So the lab owner submits a claim to Medicare. One genetic testing claim, I’ve seen them as high as $24,000 for one claim.
He describes South Florida as ground zero for this type of healthcare fraud, which targets people all over the country. The Office of Inspector General works with state and federal partners like the FBI, Department of Justice, U.S. Attorney’s Office and the Centers for Medicare and Medicaid Services to crack down on these crimes.
“We have a health care fraud strike force…Miami is the largest in the country,” he said.
The cost of genetic testing fraud is staggering.
“From 2018 to present, according to the data, genetic testing fraud is responsible for about $7 billion in fraud,” according to Mahmood.
Despite that, in 2022 only about 2 cents of every $100 spent by Health and Human Services went to oversight and enforcement -- prompting the agency to ask for additional funding this year.
“We have arrested people. But, you know, the fraud hasn't stopped. We have limited resources. We do the best we can”, Mahmood said.
Several people were charged in connection with the Boca Raton call center, including brothers Daniel and Louis “Gino” Carver who pleaded guilty last year for submitting over $67 million dollars in false claims for genetic testing and durable medical equipment patients didn’t need. A third man, Jose Goyos was convicted for tricking physicians into signing off on the fraudulent orders.
“It took up, you know, a major part of one of the floors in this large building,” Mahmood said of the call center, “But I would say at least 100 employees just, you know, you see heads just at cubicles and you just hear the phones. And they're constantly calling Medicare enrollees, convincing them to get the tests.”
They’re so convincing, even that skeptical 84-year-old man who fought telemarketers the whole call, eventually agreed to the test.
“It really is a win-win,” the caller claimed, “There’s no reason you should be scared or object to a test that your doctor approves.”
“Yeah, well. Okay,” responded the man. “If I can find it, I’ll do it.”
"CMS is committed to preventing fraud and protecting people with Medicare from falling victim to fraud. We can take swift actions to prevent illegitimate payments from going to bad actors when we have credible allegations of fraud," said a CMS spokesperson. "CMS does not confirm or discuss the existence of any ongoing investigation to ensure we do not compromise the integrity of the investigative process. However, that does not mean actions are not taken behind the scenes."
