Financial Crime Online

In crime reporting the attention is usually drawn to the ‘latest and greatest’. Spectacular stuff. Medicare fraud seems boring; not the place a cop would want to spend his career? Let’s view it from a criminal’s point of view; risk and reward. Medicare fraud nets billions, without the risks of getting shot or ripped. Medicare fraud is about getting reimbursement from Medicare by claiming medical services or goods that were never actually delivered or not really needed. The federal government does not keep track of the total amount of Medicare fraud. But if the Medicare budget is $368 billion, and 20% of all Medicare bills are fraudulent, then the total amount of fraud is an estimated $74 billion per year, according to NPR. CBS estimates the fraud to total $60 billion per year, just to give you a feel for the amounts involved. Did Medicare fraud really push the drug trade to a second place on the crime ranks in Miami?

This week the feds took down a ring of Medicare fraudsters in Florida. A physician and 29 nurses and health care operators got busted. The doctor is accused of accepting bribes to write prescriptions for about 1,300 homebound patients at Courtesy and other local clinics. But the patients didn’t need the prescribed diabetic, physical therapy and other costly services billed to Medicare, according to a federal indictment.

The arrests underscored the federal push to stamp out the latest fraud scheme in South Florida: billing Medicare for phony home healthcare claims such as treating diabetics who don’t have the disease. Previous schemes in the region, dubbed the nation’s Medicare fraud capital, were dominated by false claims for medical equipment and HIV infusion services.

Some patients were also implicated; they allegedly accepted kickbacks to use their medical files and medicare number for the false claims. Authorities said a patient was paid $100 for each prescription and referral to a home-care agency, and patients were given between $700 and $1,500 in monthly kickbacks for their Medicare numbers. Home-care operators also bribed patients with groceries, housekeeping, even flat-screen TVs, authorities said.

CBS news ’60 minutes’ ran a good story on Medicare fraud a good month ago. It documented non existing medical offices with registered addresses in shopping malls and strips full of pharmacies with hardly any patients visiting them. But the steady stream of invoices originating from these ‘fake’ offices are very real. And they get reimbursed by Medicare. CBS reported that according to the FBI, all you have to do to get into this business is rent a cheap storefront office, find or create a front man to get an occupational license, bribe a doctor or forge a prescription pad, and obtain the names and ID numbers of legitimate Medicare patients you can bill the phony charges to. “There’s a whole industry of people out there that do nothing but provide lists of patients, people’s names, Social Security numbers, addresses, and date of birth. With those four things, you can bill for a patient”. Medicare is obliged to pay the invoices within a month. It doesn’t have the resources to perform effective (fraud) controls on the waterfall of invoices. Medicare has just three field inspectors in all of South Florida to check up on thousands of questionable medical equipment companies.

Fraud is sometimes caught by patients earlier than Medicare. When patients review their Medicare statements and see all sorts of medicine and medical procedures they have absolutely no knowledge of, they ring the fraud bell. The FBI calls it “pay and chase”. First Medicare pays, then they chase. But the phony offices move every two months or so, just to be sure they won’t get caught. What an industry….. Guess what we would choose if we had to pick a criminal career; drugs or Medicare fraud?

http://www.miamiherald.com/news/southflorida/story/1383909.html

http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390.shtml

http://financialcrimeonline.com/archives/649

http://www.npr.org/templates/story/story.php?storyId=15178883

http://www.stopmedicarefraud.gov/