6 Physicians, 4 Others Arrested in N.Y. Medicaid Scam : Fraud: Thousands of indigents are alleged to have taken part in a scheme that has cost the state more than $8 million.

WASHINGTON — Stepping up its drive against health care fraud, the FBI Monday announced the arrest of 10 persons, including six doctors, on charges of illegal billing and defrauding Medicaid in a scheme dubbed “blood for pills.”

In the New York-based scheme, similar to others under investigation elsewhere in the country, poor persons on Medicaid gave “sham” clinics blood samples and their insurance numbers, which the clinics used in billing Medicaid for expensive and unnecessary medical tests and services.

For their part, the indigents then received prescriptions for expensive drugs and sold them at one-tenth their price to “diverters” who resold them directly or indirectly to the dispensing pharmacies.

Thousands of indigents allegedly took part in the scheme, costing the New York state Medicaid system more than $8 million, according to an indictment returned last Thursday and unsealed Monday.

In a related development, FBI agents in West Los Angeles searched a pharmacy, which was not named publicly, that is suspected of billing a private medical insurer for numerous prescriptions that were never dispensed, an FBI spokeswoman said.

The New York and Los Angeles cases are examples of the FBI’s expanded efforts against health care fraud, which bureau officials describe as a massive problem. On June 30, the FBI announced a nationwide crackdown on the illegal diversion of prescription drugs and false billing of Medicaid and private insurance firms.

That effort, called Operation Goldpill, included only one physician, a doctor of osteopathy, among the 97 persons initially charged. The total number charged stood Monday at 254 persons, with 11 pharmacies seized, $10.8 million in assets seized for forfeiture and $6.6 million in fines and restitution ordered by courts.

The New York indictment accused the six doctors and the others of operating four medical clinics and a pharmacy as a criminal enterprise to defraud New York Medicaid for unnecessary office visits, diagnostic tests and prescription drugs. One defendant was said to have fled to Haiti and prospects of extraditing him to face charges are seen as minimal.

The clinics allegedly were set up in impoverished neighborhoods of Manhattan and the Bronx by Mohammed Sohail Kahn, 33, a naturalized U.S. citizen from Pakistan and a major defendant. The physicians’ roles were chiefly to provide the enterprise with valid New York State medical licenses and Medicaid provider numbers used to issue prescriptions and to bill the government insurance program. Only one of the doctors actually met with “patients.”

The New York scheme allegedly produced $746,000 in Medicaid reimbursements for the six physicians and $188,000 in kickbacks for Kahn, the indictment said.

“We will continue to do all we can to stop those who jeopardize the health of the American public with illegal medical procedures, illegal diversions of drugs and unnecessary costs,” FBI Director William S. Sessions said.