Woman pleads guilty to using Vermonters’ identities for Medicare fraud

Federal investigators announced Tuesday that a New York woman has pled guilty to a wide-ranging Medicare fraud scheme that exploited the identities of dozens of Vermont residents. The case highlights growing concerns about healthcare fraud targeting rural communities and its impact on both Medicare funding and victims of identity theft.

Melissa Caron, 42, of Albany, admitted to using personal information from at least 47 Vermonters to file fraudulent Medicare claims totaling more than $1.2 million between 2019 and 2022. According to court documents, Caron obtained names, dates of birth, and Medicare identification numbers through a data breach at a Burlington medical clinic, though investigators are still determining if accomplices were involved.

The scheme was discovered when several Vermont Medicare beneficiaries reported receiving medical equipment they never ordered, including diabetes testing supplies, back braces, and portable oxygen concentrators. Medicare had paid an average of $25,000 per victim for these items and related services.

“This case represents a particularly troubling form of healthcare fraud because it victimizes individuals twice – first through identity theft and then by potentially affecting their future medical care and coverage,” said U.S. Attorney Christina Nolan for the District of Vermont during a press conference in Burlington.

The investigation began in early 2021 when Medicare’s Fraud Prevention System flagged unusual billing patterns from five different medical equipment suppliers across three states. All the suppliers had submitted claims for Vermont beneficiaries who supposedly visited clinics in New York, Pennsylvania and New Jersey – far from their homes.

Medicare fraud has become increasingly sophisticated in recent years, with the Department of Health and Human Services estimating annual losses exceeding $60 billion nationwide. Rural states like Vermont have become attractive targets for fraudsters who bet that beneficiaries might be less likely to monitor their Medicare statements closely or report suspicious activity.

“Medicare fraud is not victimless. Every dollar stolen is money that could have provided legitimate care to seniors and disabled Americans,” said Special Agent Maureen Dixon of the HHS Office of Inspector General’s New York Regional Office, who led the investigation.

Victims reported significant disruption to their lives beyond the immediate theft of their information. Several faced delays getting legitimate medical equipment approved when their benefit limits had been reached due to the fraudulent claims. Others spent months clearing their Medicare records to ensure their future healthcare wasn’t compromised.

Barbara Donovan, 74, of Montpelier, one of the victims who spoke at the press conference, described receiving packages containing expensive medical equipment she never ordered. “At first I thought it was a mistake, but then I realized someone was using my information. I spent hours on the phone with Medicare trying to sort it out, and I worried it might affect my actual medical care when I needed it.”

Healthcare industry experts note that these schemes have become more prevalent during the pandemic, as telehealth expansions and remote services created new avenues for fraud while reducing face-to-face verification.

As part of her plea agreement, Caron will pay restitution to Medicare and faces up to 10 years in federal prison. She is scheduled for sentencing in March 2023. Federal prosecutors indicated they are investigating potential accomplices, including employees at medical facilities who may have provided access to patient records.

Medicare officials encourage beneficiaries to review their Medicare Summary Notices regularly, report suspicious charges, and protect their Medicare numbers as carefully as credit card information. The agency has also enhanced its fraud detection systems, deploying artificial intelligence tools to identify unusual billing patterns more quickly.

“This case should serve as a warning to would-be fraudsters that we are watching, and we will prosecute these crimes to the fullest extent of the law,” Nolan added. “At the same time, it’s a reminder for all Medicare beneficiaries to stay vigilant about protecting their personal information.”