• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

111 charged in Medicare scams worth $225M

U.S. Attorney General Eric Holder spoke at a press conference regarding a healthcare scam on Wednesday, Feb. 17, 2011.

February 17, 2011 12:00:00 AM PST
Federal authorities charged more than 100 doctors, nurses and physical therapists with Medicare fraud on Thursday, as part of a massive nationwide bust.Attorney General Eric Holder said the widespread bust in nine cities involved hundreds of millions of dollars in illegally billed Medicare.

More than 700 law enforcement agents arrested 111 people accused of illegally billing Medicare more than $225 million. Thursday's indictments were for suspects in Miami, Los Angeles, Dallas, Houston, Detroit, Chicago, Brooklyn, Tampa, Fla., and Baton Rouge, La.

The bust is the largest such sweep in U.S. history.

In the last two years, authorities have tried to crack down on Medicare fraud that is believed to cost between $60 billion and $90 billion each year.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. The system worked when the agency was paying hospitals and institutions that couldn't close up shop and flee the country if they'd been overpaid.

But as Medicare has expanded to one of the largest payer systems in the world, the agency has struggled to weed out crooks. There are about 1.3 million licensed suppliers nationwide with 18,000 new applications coming in every month.

Health and Human Services Secretary Kathleen Sebelius has promised more decisive action on the front end, by vigorously screening providers and stopping payment to suspicious ones, under greater authority granted by the Affordable Care Act.

The Associated Press contributed to this report.