Nationwide Medicare Fraud Ring Busted

U.S. Crackdown Thwarts Elaborate Scam That Attempted To Bilk Medicare Out Of $50 Million

(CBS/AP)  Federal authorities indicted 53 people on Wednesday for schemes to cheat Medicaid out of $50 million.

Suspects were arrested in Detroit, Miami, and Denver as part of a wide-ranging effort by the government to crack down on those allegedly defrauding the government-funded health care program for the elderly and disabled.

Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius, and FBI Director Robert Mueller announced the charges at a news conference in Washington.

Sebelius said the Obama administration is determined to crack down on Medicare fraud through new teams of investigators detecting patterns of false billing. Forty of the suspects have already been arrested and the rest are being sought, authorities said.

"The Obama administration is committed to turning up the heat on Medicare fraud," said Sebelius.

"As demonstrated by today’s charges and arrests, we will strike back against those whose fraudulent schemes not only undermine a program upon which 45 million aged and disabled Americans depend, but which also contribute directly to rising health care costs that all Americans must bear," Holder said.

Last month, Holder announced the federal government would step up health care fraud efforts nationally, increasing the budget by 50 percent to $311 million in 2010 and adding manpower to task forces in Miami, Los Angeles, Houston and Detroit.

Forty of the suspects have already been arrested, authorities said. Some of the suspects were living the high life. CBS News obtained exclusive video of one of the arrests - in a wealthy Detroit suburb.

The announcement came in a week that the administration is making a major push to advance health care reform legislation.

According to federal indictments unsealed today, the suspects billed Medicare for "injection and infusion therapy" that was either medically unnecessary or never administered, reports CBS News correspondent Nancy Cordes. They offered cash kickbacks of approximately $25 per visit to patients to play along and invented "sham companies" to launder the money.

Watchdog groups estimate anywhere from 3 to 20 percent of Medicare spending is fraudulent - up to $70 billion dollars a yea, wasted, Cordes reports.

And Medicare spends less to combat fraud than many private insurers, according to Mark McClellan, who ran the massive program under President Bush.

"Doctors billing for more than 24 hours a day worth of services that should be a red flag," McClellan told Cordes. "To detect those kinds of problems, though, you need good computer systems in place, up-to-date monitoring systems."

The administration admits the $50 million scam they stopped today is just a drop in the bucket, but they say they wanted to send a signal they are stepping up enforcement, Cordes reports.

A day earlier, prosecutors in Miami announced arrests in a separate Medicare fraud case. In that case, eight people were charged with trying to steal $100 million from Medicare and Medicare Advantage.

The defendants were charged in the elaborate scam authorities say billed Medicare for bogus HIV and cancer infusion drugs using dozens of storefronts in Florida, North Carolina, South Carolina, Georgia and Louisiana, authorities said.

Two of the defendants and about $30 million are still missing.

"The breadth and scope of these schemes is different than what we've seen before," Acting Miami U.S. Attorney Jeffrey Sloman said.

In some ways, Miami federal authorities say, that's good news. It shows Miami's stepped up health care fraud task force is working. They've prosecuted $1.5 billion in health care fraud cases in the past three years. Miami alone has had 146 convictions since 2007 in these cases.

The fact that the suspects had to move to other states and other avenues of Medicare - in this case, Medicare Advantage - signals an understanding on the streets that officials are on to their old tricks. And that the task forces are working, Sloman said.

Medicare Advantage allows the elderly and disabled to get benefits through private health insurers. The plans receive a government subsidy and generally offer more benefits than traditional Medicare.

In most health care fraud cases, the money is easier to track because there's a bank transfer. Authorities say the group owned two check cashing stores, netting between $30,000 and $80,000 in cash several times a week. They fronted through bogus medical clinics around the Southeast. Some of the storefronts in other states were nothing more than P.O. boxes.

Miami has long been considered a hotspot for such crimes. For example, South Florida bills for 75 percent of all HIV insurance claims nationally, though the area is home to less than 10 percent of patients with HIV.

[John_Merritt]

My goodness people. These scams have been going on since the late 70's and over the past 30 years they have been perfected to the hilt. Now they decide they are going to clamp down? These scams have circled the globe numerous times. You would be amazed where some of these scams originate. They might have players here, but these monies have been feeding people, places and things overseas for years. Give me a break. Republicans or democrats, it makes no difference. Thievery has been going on since the beginning of time and now that we have the technology and know-how, it goes along the lines of 'Katie bar the door'. They have not even begun to infiltrate these organizations. Not even close. 50 people, Ha! There must be 50,000 people at least out there just in the US that are fleecing America. Wakeup.

[dahizzle]

Cubans. Why do you think they vote Republican? As long as they share the take they do what they want.

[speakinup22]

"Some of the beneficiaries accepted cash payments in exchange for signing paperwork claiming they had received certain medical treatments, authorities said. -article



Part them out to people that have organ needs.

[cattiej]

So they raided some places in South Carolina, and where was the Governor Sanford during the raid, on his way back from Argentina?
Sanford should be impeached today...throw his butt out and Sanford wife knew he was gone, she should be thrown out too...How many of these people who received fraudulent Medicare money are illegal aliens. There are many store-front so called medical office's that I think deal in bogus Medicare fraud..Arrest them all.

[ToolMangler1]

"Huarte paid the fake store owners in cash "with the understanding that (they) would flee to Cuba to avoid law enforcement detection or capture," according to the indictment.
Experts say it's a common problem in health care fraud cases, with suspects taking advantage of Miami's easy access to other countries to flee. Dozens of defendants are all believed to be in Cuba.
"We have about 50 fugitives in health care fraud cases, many of them in Cuba," said Alicia Valle, special counsel to the Acting U.S. Attorney."




Now if we normalize relations with Cuba, Those guys geese will be cooked.
(and a bunch of other escapees will be brought back for trial)

[straightmate]

If they start looking closer they'll find alot more.

[consciousnes]

only 20 years too late

[Kuei1248]

Maybe they should go to Rockford Illinois and arrest the multitudes of crack heads getting public aide and using it to buy drugs. Here, I'll start the list:

Deborah Averill Peterson
Dan Peterson

But it's ok. They have each already been to prison numerous times on felony charges. These are the kind of people I love to support with my hard earned tax dollars!

[1notrub11]

For example, South Florida bills for 75 percent of all HIV insurance claims nationally, though the area is home to less than 10 percent of patients with HIV.

And how long has this been going on? It never ceases to amaze me that people (the government) who have been charged with the care of funds provided to them by taxpayers, exhibit almost no responsibility - not even as much as if it were their own money.
I also find it difficult to believe that you can handle that much money, through banks eventually, using "store fronts". Are there no regulations for check cashing stores, to have licenses or the like? Regardless of whose money they are handling?
Yikes

[ononotagain]

While they're at it, feds should check out docs who are under contract at assisted living-nursing home facilities -- the ones who charge $300 for weekly "visits" that amount to: "Hello, Stella, how are you today? Good? OK, see you next week."

Then, there's the medical transport services, that charge $2,000 for a "trip" of 1/4 mile, and when questioned about the excessive fee, respond: "What do you care? Your portion is only $25."

We already spend plenty on health care in this country. We just need to weed out the crooks.

[1notrub11]

Absolutely agree. There are no apparent "quality" checks on these kind of activities. Furthermore, I would find a way to throw the book at these guys. In a sense, as a crime against the citizens of the country, it is a form of "treason", in my view.

[straightmate]

Yeah, this is the core of the problem. It's rampant in the midwest, where all the "Frank Burns" are. They'll operate on those poor old antiques every chance they get

[johninpennsyl]

Our whole health care system is a fraud.
Is Eric gonna arrest everybody?

[veteran71]

Meanwhile, still no investigations or prosecutions of KNOWN War Criminals, Shrub, Darth, Kindasleezy, Rummy, Gonzo, et al, by the DINO/Corporatist Party, or of the looting of the entire Nation by the International Banking Crime Cartel, the Federal Reserve Zionist Nazi Bank......
The laws are only meant to control the "Little People". For the Ruling Elite and their wholly-owned representatives in government, any accountability is "Off the Table".....(Just ask Nancy)
Somebody get a Rope.........

[au_fait]

OMG here comes the blame game. Lets just cut medicare and not worry about it. Solves that problem and the hemoraging of our debt as a nation.

[connunism]

Notice that the Rethuglicons did nothing to stop this scam while they were fleecing the national treasury?

[Joe_NY_15]

as Bin Biden would say, four words: On Obama's Watch

[berniew4]

Interesting how the republicans "OF COURSE ' are guilty here. Today I read that the GOVT 'DEMO CONTROLLED " is paying at least 8000 soc sec checks to dead people . This comes to 100 nillion per year .. Where is the vfraud squad to stop the incompetent demo employees. AHH But that's different it is BUSH's fault and the funds are going to those who vote demcratic. And there are still those who :"""THINK "" OBAMA's govt is honest ??

[jojo9357-2009]

Really, did you read the article? "It shows Miami's stepped up health care fraud task force is working. They've prosecuted $1.5 billion in health care fraud cases in the past three years. Miami alone has had 146 convictions since 2007 in these cases." I think that was before Obama.