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May 2, 2012

DOJ conducts "nationwide takedown" of 100+ persons involved in Medicare fraud

I just received a whole bunch of e-mails from the US Justice Department concerning what it is calling a "nationwide takedown" of lots and lots of persons involved in Medicare fraud.  This primary (and very lengthy) official press release provides the basics: 

Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in seven cities has resulted in charges against 107 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing....

This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in strike force history.

HHS also suspended or took other administrative action against 52 providers following a data-driven analysis and credible allegations of fraud. The new health care law, the Affordable Care Act, significantly increased HHS’s ability to suspend payments until an investigation is complete.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques. More than 500 law enforcement agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown. In addition to making arrests, agents also executed 20 search warrants in connection with ongoing strike force investigations....

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $452 million in fraudulent billing....

In Miami, a total of 59 defendants, including three nurses and two therapists, were charged today and yesterday for their participation in various fraud schemes involving a total of $137 million in false billings for home health care, mental health services, occupational and physical therapy, DME and HIV infusion....

Seven individuals were charged today in Baton Rouge, La., for participating in a fraud scheme involving $225 million in false claims for CMHC services....

In Houston, nine individuals, including one doctor and one nurse, were charged today with fraud schemes involving a total of $16.4 million in false billings for home health care and ambulance services....

Eight defendants, including two doctors, were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $14 million. In one case, two individuals allegedly billed Medicare for more than $8 million in fraudulent billing for DME.

In Detroit, 22 defendants, including four licensed social workers, were charged for their roles in fraud schemes involving approximately $58 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy.

In Tampa, Fla., a pharmacist was charged with illegal diversion of controlled substances. One defendant was charged last week in Chicago for his alleged role in a scheme to submit approximately $1 million in false billing to Medicare for psychotherapy services.

May 2, 2012 at 02:59 PM | Permalink

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Comments

well maybe that development explains this result:

http://gawker.com/5905623/almost-half-of-all-doctors-regret-becoming-doctors

Posted by: Daniel | May 2, 2012 3:41:37 PM

I hope that this restores the Medicare program to solvency.

Posted by: Jardinero1 | May 2, 2012 3:42:32 PM

"I hope that this restores the Medicare program to solvency."

Do you think that declining to prosecute fraud/false billing would be an improvement?

Posted by: guest | May 2, 2012 4:28:31 PM

I suppose that if you go after false billing then the flip side of that is to audit the government's compensation to providers. Most of my clients who are doctors gripe constantly about how either medicare refuses to pay market rates or flat out refuses to pay some or all of some billings. Many doctors become non-subscribers for this very reason. I think that if you kept a ledger of underpayments/non-payments and compared it to false billings you would find... I don't know what you would find. Still there is another side to the issue which is that Medicare frequently doesn't. compensate correctly in a market sense or legal sense.

Posted by: Jardinero1 | May 2, 2012 4:59:28 PM

Jardinero1 --

The problem is that Medicare, even if operated with complete honesty, is structurally headed for bankruptcy, as the recent GAO report confirmed (again).

That said, I'm happy to see these crooks taken down, and I give Mr. Holder and the career people who are at the heart of this all credit. I just can't wait for the excuses to begin: "It was just sloppy bookkeeping! I get ALL my mansions in Aruba by being sloppy!"

Posted by: Bill Otis | May 2, 2012 5:04:19 PM

"I suppose that if you go after false billing then the flip side of that is to audit the government's compensation to providers. Most of my clients who are doctors gripe constantly about how either medicare refuses to pay market rates or flat out refuses to pay some or all of some billings. Many doctors become non-subscribers for this very reason. I think that if you kept a ledger of underpayments/non-payments and compared it to false billings you would find... I don't know what you would find."

I don't know what you would find either, but what you're describing sounds like a good reason to become a non-subscriber rather than a good reason to resort to outright fraud as a form of self-help. (Not that it should matter, but I also tend to doubt that Medicare wrongly denied these providers the Medicare-going-rate for services actually provided in anything approaching the amount of the false/inflated billings for services that were not provided. Whether the Medicare-going-rates for services are too low is another issue/problem, but it's another problem for which self-help in the form of outright fraud and billing for services never provided can't be the answer.)

Posted by: guest | May 2, 2012 5:47:00 PM

"In Detroit, 22 defendants, including four licensed social workers, were charged for their roles in fraud schemes involving approximately $58 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy."

You think there's any realistic chance that if you had a ledger of services these folks actually provided, and determined after-the-fact that they were entitled to "market rate" rather than the reimbursement rate for them, that you'd get to $58 million?

Posted by: guest | May 2, 2012 5:51:32 PM

Mr. Otis, My first comment in this thread was entirely sarcastic.

Posted by: Jardinero1 | May 2, 2012 5:53:36 PM

Jardinero1 --

Good!

Posted by: Bill Otis | May 2, 2012 10:38:45 PM

May be we could catch more of this medicare fraud if we left the medical marijuana dispensaries alone and concentrated on all the medicare fraud I would guess this recent fraud is just the tip of the iceberg.

Posted by: Anon | May 3, 2012 6:35:08 AM

Anon --

We could also catch more of the Medicare fraud if we left meth dealers and bank robbers alone and devoted the investigative dollars saved to Medicare fraud.

Or, to simplify things, if we took the tax dollars devoted to A and spent them on B, there would be more spending on B.

I think we've got that now.

Posted by: Bill Otis | May 3, 2012 8:36:12 AM

Holder gets his headline. Obama gets to pose as tough on crime.

Informed on the matter by a DOJ press release, Bill Otis spares everyone involved a lot of time and fuss by declaring as crooks the 100 citizens who've been "taken down."

And ultimately -- as sometimes happens in these grand, splashy, task-force inquisitions -- a number of folks guilty of little more than associating with those who might actually have intentionally broken the law will go broke trying to stay out of prison and ultimately confess to a felony or two...as the only rational alternative to draconian alternatives built into the system.

Justice is served.

Posted by: John K | May 3, 2012 12:42:53 PM

John K --

Take it easy. "Taken down" is just a synonym for "arrested." And I have no particular faith in the press releases of the present DOJ, but this one didn't have any very peculiar aroma that I could detect.

And justice has not yet been served, but it will be when a bunch of crooks who've been enriching themselves by cheating a system designed for those in need get hammered. Some of us think that honest billing is better than fake billing.

Posted by: Bill Otis | May 3, 2012 7:11:29 PM

i think it's funny myself. After god knows how many 100's of thousands of manhours in a nation of almost 400,000,000 they found 100 breaking the laws covering medicare!

GET REAL!

Posted by: rodsmith | May 4, 2012 12:06:40 PM

Bill,

I know what take down means.

I don't oppose honest billing. To the contrary, years ago after my Dad suffered a minor stroke a physical therapist billed Dad's insurance for six therapy sessions that never took place. I reported it to the authorities but as far as I know nothing ever came of it; perhaps because it wasn't an election year and the DOJ didn't have a big, jazzy crusade under way.

What I oppose are big-government, mighty task-force roundups of citizens. From what I've seen of them, the needless human misery and careless injustices they typically produce cast a pall on any good they might actually do.

Posted by: John K | May 4, 2012 1:41:18 PM

'I get ALL my mansions in Aruba by being sloppy!"

no, it only applies to those located in Hawaii

Posted by: muy bueno | May 4, 2012 4:40:26 PM

muy bueno --

You mean like President Obama?

Posted by: Bill Otis | May 5, 2012 11:51:15 AM

The link to the DOJ press release also has links to the charging documents in many (all) of the cases. A quick review of these documents reveals that the alleged fraud was against the supplemental medical insurance and prescription drug programs.

What is interesting is that these two programs are completely solvent. From the 2012 Report of the Social Security and Medicare Boards of Trustees at http://www.ssa.gov/oact/TRSUM/index.html

"The Trustees project that Part B of Supplementary Medical Insurance (SMI), which pays doctors’ bills and other outpatient expenses, and Part D, which provides access to prescription drug coverage, will remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next year’s expected costs."

In other words, these two programs are funded from general revenue. There is no actuarial crisis in this part of Medicare. It's not insolvent. It's not going bankrupt. This is so because the political will exists to make and keep it solvent.

I cite this to point out that the political debate about the insolvency of the other parts of Social Security and Medicare mischaracterizes the problem as an actuarial crisis. This is true as far as it goes. But the real crisis, if these other parts are in fact necessary to the general welfare of the nation, is a lack of political will.

This mischaracterization permits politicians to avoid speaking plainly about the social utility of these programs within the context of their costs. The debate is framed that we must reform these programs because the immutable arithmetic of the actuaries command it, rather than do we want (need) the social benefits of these programs and are they worth what we pay for them.

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