Telemedicine can bring medical specialty resources to primary care physician offices, improve access to medical care for people who live in remote or under-served areas, and enable post-discharge and rehab patient monitoring. Those are just a few of telemedicine’s myriad benefits. But there’s also a dark side. Some unscrupulous companies and nefarious individuals consider the Medicare system to be ripe fruit for illegal harvesting via telemedicine. Medicare recently struck back.

In a joint release, the FBI and Department of Justice announced federal indictments and law enforcement actions against 24 individuals who used telemedicine to defraud Medicare of more than $1.2 billion. The defendants included executives of five telemedicine companies, owners of dozens of durable medical equipment (DME) companies (some of whom owned multiple companies), and three licensed medical professionals. CMS, Medicare’s service company, also took administrative action against 180 DME companies.

The charges allege DME companies gave kickbacks to medical professionals who made referrals for unnecessary back, shoulder, knee, and wrist braces for hundreds of thousands of elderly and disabled Medicare beneficiaries. An international telemarketing network lured the patients by promising free or low-cost braces. The patients had minimal or no contact with the prescribing physicians associated with the telemedicine companies. The kickbacks were laundered through international shell companies to buy luxury cars, yachts, and real estate, according to the indictments.

Citing the joint nature of the indictments and actions by many law enforcement agencies and departments, FBI assistant director Robert Johnson called the case “one of the largest health care fraud schemes in U.S. history.” The Medicare Fraud Strike Force formed in 2007. Since inception, the Strike Force has indicted more than 4,000 individuals collectively responsible for billing Medicare for more than $14 billion.

Health technology has the potential to improve patient outcomes, save lives, and save a significant portion of healthcare costs. Unfortunately, some circumstances cause expenditures to increase. This effort to identify and halt wasteful fraud can help tip the financial balance back toward the positive side of the scale.