Thread: Medicare Fraud

Feds make more arrests in major Medicare fraud case

A widening federal investigation into a Miami-based company accused of Medicare fraud netted the arrest of several doctors along with more than a dozen other defendants.

BY JAY WEAVER
jweaver@MiamiHerald.com
A trio of doctors altered the diagnoses and medications of thousands of patients to make it look like they qualified for purported group therapy sessions at American Therapeutic’s chain of South Florida clinics, costing the taxpayer-funded Medicare program hundreds of millions of dollars, prosecutors say.

The doctors -- Mark Willner, Alan Gumer and Alberto Ayala – were charged along with 17 others Tuesday in the nation’s largest mental healthcare racket, according to the Justice Department.

The charges were the latest in the widening criminal case against Miami-based American Therapeutic, which prosecutors say exploited patients - some suffering dementia and Alzheimer’s disease - who could not possibly benefit from the treatments.

“As today’s charges reflect, defrauding the Medicare system was not an aberration at ATC, but instead part and parcel of its business operations,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s criminal division. “By exploiting positions of trust, these defendants masked their fraudulent operation as a legitimate mental health business.”

Hooray!!! they arrested some more of the bastards that are ripping off the taxpayers!

The big problem is that of course this is just the tip of the iceberg. I'd bet that about half the money spent on Medicaid/Medicare is lost to fraud. And that's a huge chunk of the federal budget.


EDIT: Here's more from the FBI website...

Health Care Fraud Takedown
111 Charged Nationwide

Originally Posted by FBI

Twenty individuals, including three doctors, were charged in South Florida earlier this week for their alleged participation in a fraud scheme involving $200 million in Medicare billing for mental health services.

And that was just a precursor to today’s national federal health care fraud takedown involving charges against 111 defendants in nine cities in connection with their alleged participation in schemes to bilk Medicare out of an additional $225 million. More than 700 law enforcement personnel from the FBI and Health and Human Services-Office of Inspector General (HHS-OIG), multiple Medicaid fraud control units, and other state and local law enforcement agencies took part in today’s operation, which was announced at a press conference in Washington, D.C.

HEAT. The Florida case and the cases involved in today’s takedown were the result of the Department of Justice/HHS Health Care Fraud Prevention and Enforcement Action Team, or HEAT, initiative and its Medicare Fraud Strike Force operating in a number of U.S. cities. In addition to Baton Rouge, Brooklyn, Detroit, Houston, Los Angeles, Miami, and Tampa, Attorney General Eric Holder announced at today’s press conference the expansion of the strike force into two more cities—Chicago and Dallas.

Medicare Strike Force members include federal, state, and local investigators who use data analysis techniques to identify high-billing levels in health care fraud hot spots, targeting chronic fraud and emerging or migrating schemes by criminals masquerading as health care providers or suppliers.

In the Florida case, the indictment alleges that various defendants paid kickbacks to patient brokers and owners or operators of halfway houses and assisted living facilities for delivering patients to community mental health facilities owned by a particular corporation. The facilities would then submit claims to Medicare for services that weren’t medically necessary, or weren’t provided at all.

The defendants charged in today’s takedown are accused of various fraud-related crimes, including conspiracy to defraud Medicare, criminal false claims, violations of the anti-kickback statutes, money laundering, and aggravated identify theft. Some of the cases include:

■Nine charged in Houston for $8 million in fraudulent Medicare claims for physical therapy, durable medical equipment, home health care, and chiropractor services.
■Five charged in Los Angeles for a scheme to defraud Medicare of more than $28 million by submitting false claims for durable medical equipment and home health care.
■Eleven charged in Chicago for conspiracies to defraud Medicare of $6 million related to false billing for home health care, diagnostic testing, and prescription drugs.
In addition to our involvement with HEAT and the Medicare Fraud Strike Force, the FBI remains committed to working additional health care fraud investigations with our partners at HHS-OIG, individual state Medicare fraud offices, and investigative units from major private insurance companies. We also work jointly with the Drug Enforcement Administration, the Food and Drug Administration, and the Department of Homeland Security to address drug diversion, Internet pharmacies, prescription drug abuse, and other health care fraud threats.

We’re currently working more than 2,600 pending health care fraud investigations. During fiscal year 2010, cooperative efforts with our law enforcement partners led to charges against approximately 930 individuals and convictions of almost 750 subjects. But perhaps even more satisfying—we dismantled dozens of criminal enterprises engaged in widespread health care fraud.

111 people in 9 cities.

That's a lot of people and it might be indicative of a prevailing problem. I do have one question though. Do the results differ much from what would happen to a private insurance company? I'm sure they defauded private insurers as well but I'm not sure it would be on the same level because the private company would have a vested interest in investigating faud where the government run program wouldn't.

Originally Posted by fishjoel

That's a lot of people and it might be indicative of a prevailing problem. I do have one question though. Do the results differ much from what would happen to a private insurance company? I'm sure they defauded private insurers as well but I'm not sure it would be on the same level because the private company would have a vested interest in investigating faud where the government run program wouldn't.

Yeh, cause like government people can't be sent to jail and police aren't given promotions for arresting them. Also, police aren't taxpayers themselves. Private cos, OTOH, want everyone to know when they're caught being fraudulent and therefore never cover it up because this gives the public confidence in them and it always looks good on the resume to have worked for a company now famous for biliking the public

Originally Posted by fishjoel

That's a lot of people and it might be indicative of a prevailing problem.

I read a book by Malcom Sparrow about this subject several years ago and was quite shocked that it was such an extensive problem. I was very aware of the fraud via personal experience, but not aware of how big of a problem it is. There's a free preview at google books.

License to Steal: How Fraud Bleeds America's Health Care System.

Sparrow estimated this looting to be in the hundreds of billions of dollars.

There's been some progress made in the decade since that book was written. The HHS and DOJ created the Medicare Fraud Strike Force back in 2007 to try to combat the problem and they've made hundreds of arrests over the last 4 years.

Also, provisions in the ACA strengthened the DOJ's power to investigate fraud, made it a federal crime to obstruct a fraud investigation, and created stiffer penalties for committing fraud. We should keep that part and scrap the rest of it. Selebus and Holder are under alot of pressure from congress to show results with that $500M to hire new agents.

Originally Posted by fishjoel

I do have one question though. Do the results differ much from what would happen to a private insurance company? I'm sure they defauded private insurers as well but I'm not sure it would be on the same level because the private company would have a vested interest in investigating fraud where the government run program wouldn't.

It's just as difficult to estimate exactly how widespread health care fraud is in the private sector as it is in the public sector. After all, to compensate for the losses from fraud, insurance companies can and do simply raise premiums. I think the Fraud Strike Force should be expanded and unleashed aggressively there too. There is another thread here at USPOL about doctors practicing "defensive medicine" ostensibly to avoid lawsuits. Personally I consider that to be fraud and it should be treated as such.

If the rampant fraud is not contained in both the public and private sectors the USA will have no choice but to go to a horrible single-payer system. I think we need to hire more investigators and run more sting operations. There's a jobs bill for you that won't sink the budget. I think the savings would pay for their salary ten times over.

ah yes, the so called professional medical field. just as base as the non-professional trades persons. I quess having a higher degree of education does not take away the thrill of thievery. that is why I am disguted with the mantra of college level grads who think they are better than those without their sheepskins,, and mortarboard hats.

Originally Posted by Moonglow

ah yes, the so called professional medical field. just as base as the non-professional trades persons. I quess having a higher degree of education does not take away the thrill of thievery. that is why I am disguted with the mantra of college level grads who think they are better than those without their sheepskins,, and mortarboard hats.

And they should be treated the same as common criminals and thrown in prison.

Too often, health care fraud is written off as a "billing error" or "defensive medicine" when it is really just an attempt to steal other people's money.

One more win for the Obama team.

I wonder if there is some sort of ratio, like an iceberg. For every villain they catch, do 9 other villains decide it is time to stop stealing before they themselves get caught?

In other words, is there a multiplier effect, where for every $100 million they catch, another billion of on-going fraud ceases.

Originally Posted by fishjoel

That's a lot of people and it might be indicative of a prevailing problem. I do have one question though. Do the results differ much from what would happen to a private insurance company? I'm sure they defauded private insurers as well but I'm not sure it would be on the same level because the private company would have a vested interest in investigating faud where the government run program wouldn't.

They do it to private companies, Medicare, and even cash paying customers. It's considered normal practice. It only gets called fraud if it's completely fake billing for large amounts. When hospitals do little things like charge you for drugs you didn't get to pad the bill a little, it just gets challenged(sometimes) and removed.

The difference between Medicare and private companies is that Medicare likes to be able to claim that they don't have high administrative costs. So they either don't investigate fraud much, or they outsource it to the Justice Department. But the reality is that Medicare's administrative costs+fraud are about what you'd expect in the private sector.

Originally Posted by Dick Martin

One more win for the Obama team.

I wonder if there is some sort of ratio, like an iceberg. For every villain they catch, do 9 other villains decide it is time to stop stealing before they themselves get caught?

In other words, is there a multiplier effect, where for every $100 million they catch, another billion of on-going fraud ceases.

I'm sure the fear of being caught can deter some corruption, but I think this ratio is a bit optimistic.

Originally Posted by Dick Martin

One more win for the Obama team.

I wonder if there is some sort of ratio, like an iceberg. For every villain they catch, do 9 other villains decide it is time to stop stealing before they themselves get caught?

In other words, is there a multiplier effect, where for every $100 million they catch, another billion of on-going fraud ceases.

Lawd, hep us................the Obama team no less.