This past Friday July 16 at a press conference in Miami Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius announced that over 360 federal agents had raided the homes and offices of Medicare fraudsters accused of stealing over $251 million. Authorities say most of the thirty-six individuals arrested Friday were based in Miami, though other operations shut down in the bust were located in places like New York City, Detroit, Houston, and Baton Rouge. Ninety-four people were indicted in total as a result of the sting. Authorities claim the suspects – which include several doctors and nurses – billed Medicare for unnecessary equipment, HIV treatments, and physical therapy that their patients never received. Hidden surveillance equipment caught clinic owners and doctor’s offices paying patients (and undercover agents) under the table in exchange for use of their Medicare numbers and offering bonus rewards to patients who would recruit others to the scam.
In the most peculiar of these operations, a medical center in Brooklyn scammed $72 million from Medicare by submitting bogus charges for physical therapy for elderly Russian immigrants. Patients who sold the office their Medicare numbers were paid by a man in a back-room who did nothing but bribe patients all day. Authorities say the “kick back room” was decorated with posters resembling Russian propaganda, which read in Russian “Don’t Gossip” and “Be on the lookout: In these days, the walls talk.”
Sebelius and Holder commented at the healthcare fraud prevention summit in Miami that these busts are an important step toward conquering the larger problem of fraud which has seriously impacted the system in recent years. Lately, schemes have become more sophisticated. In the past, fraudsters (usually clinic owners) would bill Medicare multiple times for the same piece of medical equipment which no patient ever received. Today, schemes involve a more complex web of doctors, patients, clinic owners, and sometimes violent criminals. Mobsters and violent offenders have started getting in on the Medicare fraud action because they find it more lucrative and with less severe criminal penalties than other offenses like drug or gun trafficking.
Eliminating an estimated $60-90 billion per year in Medicare fraud is a key component of President Obama’s plan to pay for healthcare reform. In order to accomplish this, federal authorities have promised more man power and funding and are using new technologies to keep up with criminals. It used to take ninety days before the feds detected a scam, by which point criminals had usually slipped away with millions of dollars. Now, authorities monitor billing data in real time allows them to catch a scam almost immediately.
The most problematic area for authorities continues to be Miami, which has long been the epicenter of Medicare-related fraud. For example, according to a federal report Miami-Dade county received about $520 million from Medicare in home health payments in 2008. That’s more than the rest of the country received combined, even though Miami-Dade contains just 2% of patients eligible for those benefits. In 2007, authorities launched a strike force in the area to address this growing problem. The program which started there has expanded to seven cities around the country and has resulted in over 720 indictments for those who’ve defrauded Medicare for more than $1.6 billion.