Medicare Fraud: A $60 Billion Crime

A.G. Holder Tells 60 Minutes More Oversight Is Needed; Scammer Explains How Easy It Is To Steal Millions

(CBS)  Of all the problems facing the United States right now, none are more important than health care.

President Obama says rising costs are driving huge federal budget deficits that imperil our future, and that there is enough waste and fraud in the system to pay for health care reform if it was eliminated.

At the center of both issues is Medicare, the government insurance program that provides health care to 46 million elderly and disabled Americans. But it also provides a rich and steady income stream for criminals who are constantly finding new ways to steal a sizable chunk of the half trillion dollars that are paid out each year in Medicare benefits.

In fact, Medicare fraud - estimated now to total about $60 billion a year - has become one of, if not the most profitable, crimes in America.

This story may raise your blood pressure, along with some troubling questions about our government's ability to manage a medical bureaucracy.

StopMedicareFraud.gov

If you want to find Medicare fraud, the first place you should look is South Florida, where 60 Minutes and correspondent Steve Kroft were told it has pushed aside cocaine as the major criminal enterprise.

It's a quiet crime - there are no sirens or gunfire. The only victims are the American taxpayers, and they don't even know they are being ripped off.

FBI Special Agent Brian Waterman, who 60 Minutes rode with for several days, told us the only visible evidence of the crimes are the thousands of tiny clinics and pharmacies that dot the low-rent strip malls.

You don't even know they're there because there's never anyone inside. No doctors, no nurses and no patients.

"This office number should be manned and answered 24 hours a day," Waterman explained, standing outside one of those small, unstaffed businesses.

The tiny medical supply company billed Medicare almost $2 million in July and a half million dollars while 60 Minutes was there in August, but we never found anybody inside, and our phone calls were never returned.

Sometimes, they don't even have offices: we went looking for a pharmacy at 7511 NW. 73rd Street that billed Medicare $300,000 in charges. It turned out to be in the middle of a public warehouse storage area.

"They've already told us that there's no offices here," Waterman told Kroft. "There are no businesses here. In fact they are not even allowed to have a business here."

Waterman is the senior agent in the Miami office in charge of Medicare fraud. And Kirk Ogrosky, a top Justice Department prosecutor, oversees half a dozen Medicare fraud strike forces that have been set up across the country.

The office Kroft visited operates out of a warehouse at a secret location in South Florida and includes investigators from the FBI, Health and Human Services, and the IRS.

"There's a healthcare fraud industry where people do nothing but recruit patients, get patient lists, find doctors, look on the Internet, find different scams. There are entire groups and entire organizations of people that are dedicated to nothing but committing fraud, finding a better way to steal from Medicare," Waterman explained.

"Is the Medicare fraud business bigger than the drug business in Miami now?" Kroft asked.

"I think it's way bigger," Ogrosky said.

Asked what changed, Ogrosky told Kroft, "The criminals changed."

"Sophistication," Waterman added.

"They've figured out that rather than stealing $100,000 or $200,000, they can steal $100 million. We have seen cases in the last six, eight months that involve a couple of guys that if they weren't stealing from Medicare might be stealing your car," Ogrosky explained.

"You know, we were the king of the drugs in the '80s. We're king of healthcare fraud in the '90s and the 2000's," Waterman added, speaking about South Florida.

[ontos]

I have been trying to alert Medicare to a case of fraud and they could care less!The Attorney Generals office isn't interest either.All i get is "smoke and mirrors" and"you need to contact this agency" instead of trying to fix the issue!!It seeme there is a LICENSE TO STEAL once you get involved as a vendor with MEDICARE!THE HOSPITAL I AM TRYING TO REPORT WAS FOUND GUILTY OF FRAUD,FINED OVER A MILLION DOLLARS IN 2001 FOR THE SAME ISSUES I HAVE,BUT NOW IN 2009 THEY'RE BACK IN BUSINESS SCREWING PEOPLE AGAIN!!!
No wonder the country is going "down the dumper"...none of the bureaucrats care....bet some pockets are getting lined!!!I WASH I WAS 20 YRS. OLD AGAIN,I'DE GET OUT OF THE USA IN A HEARTBEAT!!
ANYBODY WANT TO BUY MY BIRTH CERTIFICATE????????????????????

[LStansbury]

The scammers are so busted! Louisiana Senior Medicare Patrol is already signing volunteers up to find the bad guys and has had calls that are under investigation alreadyy...you can sign up at www.stopmedicarefraudla.org

[OregonJames]

It would be a simple task to offer a substantial reward to those that turn in those committing fraud. A few well publicized million dollar rewards and a few lengthly prison sentences might shrink that 60 billion in frauds substantially in a short time.

[cbsblogger]

A little common sense and incentive is all it would take to put a huge dent into Medicare Fraud, just as it would have done for stopping illegal immigration. Implement new checks before payments are made, provide very harsh criminal penalities, increase dedicated staff to ferret out fraud, and encourage the public to report and get rewards.

The answer is that Congress is being influenced by the beneficiaries such as the Mafia, Russian/Jewish mob and big business to do nothing.

[mosquitoreport]

Widespread Fraud and corruption starts with the Judiciay members taking full control of our government who is to protect the people! The 60 minute report on Heath care fraud is the tip of the ice berg.

"The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny" (James Madison, Federalist No. 48, Feb. 1, 1788).

Think about how extensive this could be. Every aspect of our country is being preyed on by one group of people. If we lived back in the 1700s we would have a tea party and take up arms to fightback. Today we are singled out and surpressed by the judicial system.

For the record I submmitted testimony to the Senate Judiciary for effective stratigies against health care fraud on Oct.28, 2009. If you think health care fraud is bad look deeper at this issue and these numbers. All our propsed laws have to go past the U.S. Senate committee on the Judiciary and guess who controls it. This might be a good time to get to get pissed.

United States Senate Committee on the Judciary is made up of 19 total members of which 13 are lawyers and 6 not lawyers the american people are being screwed! This effectively gives total control of our government to one group of people the judicial members. They currently control all branches 1) executive branch " controlled by Lawyer" 2) legislative branch controlled by lawyers "committee on the Judiciary controlled by 13 lawyer 3) Judiciary "All legal professionals" No wonder why we have such wide spread corruption and fraud there is no one to to protect the people!!! Less than 1% of attorneys are ever prosicuted for misconduct or crimes they committ placing them above our laws.

We the people need protection and oversight of our Judicial Branch members to truly stop corruption and fraud.

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[rocketjl]

Mr. Holder, if the bad guys are stealing $60B from us, don't you think we should go ahead and put a stop to it? Let's see, I'll use some Alabama math to help you. We can hire ten thousand sharp people at a $100K each at a cost of $1B to save $59B of our tax dollars. If I can figure this much out, I wonder why all the people in the government cannot. I guess the light switch in this case is Obama's health care public option. All the problems already known cannot be fixed until we get a public option health law. ?????

[hockeyeast]

...and we want these fools(gov.) to run our health care...god help us.
Imagine that fraud!!!!

[SheilaGC]

I have written my Senators asking for a finger value law. We have always valued information. Anyone has a vast amount of information at their finger tips with the use of the Internet. I think a fair value to the information on the Internet would be the last three fingers from the hand of someone found guilty of an Internet crime be cut off from their hand. I encourage anyone who reads this to also write your Senators and ask for finger value laws for Internet Crime.

[WonderingY]

And these people are cutting payments to hospitals and doctors who actually take care of people. Think of the healthcare we could have!

[worried_grandparent]

Your story?s focus should have been on the government?s inability to efficiently administer any programs that compete with the private sector. I?ve never read about massive fraud occurring at Blue Cross or any other private health insurance program. Our politicians have proved themselves incapable of repairing Medicare and Social Security and to think the government could even consider piling a third financial disaster on our children and grandchildren is mind-boggling.