Sham Businesses Bilk Medicare for $140M
After documenting more than $140 million in Medicare fraud in south Florida, federal officials said Wednesday they will take a more thorough look at other providers of medical equipment.
An investigation in the Miami area has led to 38 arrests, including 20 on Tuesday.
These are not your standard over-billing cases, reports CBS News. Health and Human Services Secretary Mike Leavitt described it as wholesale theft in which people set up sham medical equipment dealerships in malls and office buildings claiming to be Medicare providers. In many of the cases, Medicare recipients participated in the fraud by giving their Medicare numbers to the companies in exchange for cash payments, usually $100 a month.
Some defendants are accused of stealing the Medicare numbers of beneficiaries, and then billing the government for power wheelchairs, walkers, or kits for testing blood sugar levels, said Leavitt.
"Unfortunately, that's exactly what's been happening in several areas around our country," Leavitt said.
Officials call their operation "Whack-a-mole" because new fraud schemes instantly pop up when others are shut down, CBS News reports. HHS' own lax rules are part of the problem and HHS is proposing new regulations to tighten its system.
In the past, it would often take years to build cases against crooked companies, but investigators are now able to do "real time" tracking of fraud by seeing patterns in billing databases from the Health Care Information System.
Leavitt said increased enforcement efforts will cost about $20 million annually, but could save taxpayers and beneficiaries about $2.5 billion annually. Home health agencies also will be reviewed more thoroughly.
Attorney General Alberto Gonzales said a team of federal, state and local investigators analyzed billing data in South Florida for unusual patterns. They visited companies billing Medicare, Leavitt said, but often found nobody present during business hours.
"We believe scores of shell companies have opened and obtained Medicare supplier numbers in Miami-Dade County alone," Gonzales said.
In other instances, investigators found that doctors in HIV clinics were paid to issue unneeded prescriptions to complicit patients. The patients were paid off for use of their Medicare cards.
"In some instances, patients actually receive no medication, or the wrong medications during infusion, putting them at a substantial risk of harm," Gonzales said.
This first phase of the crackdown targeted South Florida because of its large senior population, but it will be expanding to other places around the country.