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Medicare fraud arrests noted, but not enough is being done

When asked why he robbed banks, Willie Sutton famously said, “because that’s where the money is.” Modern day criminals apparently have the same motivation when they target rip-off schemes at Medicare. With close to $600 billion in annual Medicare payments, criminals now might say they steal money from the massive federal health care program because, as Sutton noted, that’s where the money is.

Last week, federal officials announced the most arrests related to Medicare fraud with 243 people being charged, including doctors, nurses and other medical professionals. In this most recent case, it’s estimated the fraud amounted to $712 million in false Medicare claims.

Going through archived newspaper stories, headlines appear every few years proclaiming the largest Medicare fraud case to date. In 2010, one headline read: “44 charged in huge Medicare fraud scheme.” Another story described details of 118 fake health clinics in 25 states submitting false Medicare billings for $100 million. The headline on that story read, “Real patients, real doctors, fake everything else.”

In 2009, the CBS program “60 Minutes” did a major exposé on Medicare fraud. The story focused on South Florida, which was then and is still a hot spot for Medicare fraud.

The CBS report quoted law enforcement officials saying that criminals in the Miami area were shifting their efforts away from illegal drugs, preferring Medicare fraud as a way to make easy money, because it didn’t involve the physical danger and arrest risks associated with the illegal drug industry.

The “60 Minutes” report said Medicare fraud was a $60 billion-a-year industry and “the only victims are the American taxpayers, and they don’t even know they are being ripped off.”

The CBS reporter visited dozens of small medical clinics located in strip malls near Miami and found they were storefronts, for Medicare scam purposes only. They found no doctors, no nurses and no patients. Yet these offices billed Medicare millions for bogus treatments. Just one of those tiny offices billed Medicare for $2 million in false claims in a single month.

The latest arrests by federal authorities led to charges of fraud, money laundering, identity theft and kickbacks.

In one case, a California doctor submitted $23 million in bogus Medicare claims for 1,000 power wheelchairs that the Department of Justice said were “not medically necessary and often not provided.”

One mental health clinic in Florida billed Medicare for $64 million for mental health treatments from 2006 to 2012 for fake patients whose names were secured through kickbacks to assisted living facilities and freelance “patient recruiters.”

In 2007, federal officials formed the Medicare Fraud Strike Force. Since its creation, the strike force has charged 2,300 people with submitting false Medicare bills of more than $7 billion.

But as impressive as the fraud arrests might be, it still appears the criminals are winning and only a small percentage of the Medicare fraud is being stopped.

Criminals and complicit doctors, nurses and medical technicians still view Medicare fraud as easy money. For that to change, enforcement needs to be increased so there are more arrests, more convictions and more people going to prison. For now, the illegal profits are too easy and the chances of being caught and sent to prison are too small.

Maybe it’s because Medicare is spending OPM — other peoples’ money — or maybe the payment processing system is simply overwhelmed and unable to verify that payments are legitimate before sending the money.

Whatever the reasons, the Medicare payment system needs to be made more secure and more effort needs to be focused on preventing bogus Medicare payments from being paid.

Medicare has enough financial pressures without massive fraud schemes depleting funds.

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