U.S. Busts 243 Providers for $713 Million Medicare, Medicaid Fraud

man-in-wheelchairThis blog does not often congratulate the Obama administration. However, it has been relatively successful at prosecuting Medicare fraud through old-fashioned, gum-shoe type investigations.

From yesterday’s news:

In Miami, the owners of a mental-health treatment center allegedly billed Medicare for tens of millions of dollars’ worth of intensive therapy that actually involved just moving people to different locations. Some of them had dementia so severe that they couldn’t even communicate.

And in Michigan, another physician allegedly prescribed unnecessary narcotic painkillers in return for the use of his patients’ IDs to generate additional false billings. When they tried to escape the scheme, authorities say, he threatened to cut off the medications, to which his patients were addicted.

In the single largest crackdown in an eight-year campaign against health-care fraud, the Justice Department charged 243 people Thursday with $712 million in false billings to Medicare — the medical insurance program for the elderly — and Medicaid, which serves the poor. (Lenny Bernstein & Sari Horwitz, “Government arrests 243 in largest crackdown on health-care fraud,” Washington Post, June 18, 2015)

In any system, there will be some fraud, and it can only be detected and prosecuted through investigation. Some in Congress believe that more top-down control of medical providers can reduce fraud, going so far as wanting to impose moratoria on enrolling new providers. This is a false hope, the fallacy of which I described in recent Congressional testimony.

The best antifraud reform would be to give Medicare beneficiaries more control of the money spent on their medical care. Readers can reasonably question how a patient with severe dementia could do that. I don’t pretend to know how to prevent all financial abuse of patients with dementia. Nevertheless, I am confident that if their loved ones had power of attorney over their Medicare dollars, frauds like those busted yesterday would be less frequent.

Comments (5)

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  1. Dale says:

    An open question is: would the medicare anti-fraud push have occurred if the Wall Street Journal *had not* won their lawsuit to gain access to provider data?
    My view is that the justice department was shamed into action by the outlandish size of the payments to some of these providers, and the publicizing of that information by the Journal.

  2. Big Truck Joe says:

    Stopping true fraud is easy:
    Put any new company (started in past 3 years) who is billing an amount as larger or larger than similar companies who have been around for over 3 years on full pre-pay audit for first 6 -9 months of operations.

    Second, make citizenship status part of the Medicare provider application. If you goto the OIG most wanted list (or Dept of Justice Healthcare Fraud Heat task force) you will see the majority of criminal fraud fugitives are foreign born and have fled to their native countries or Cuba after swindling Medicare out of millions. Focus on those individuals who have nothing to lose and who are a flight risk if they defraud Medicare and MediciAid.

    Reduce the harassment of hospitals and other providers by the RACs and ZPICs and instead use those resources towards catching actual criminals.

    This link to OIG provides a truer picture of real fraud, not doctors who bill and intermediate level office visit when documentation only supports a low level office visit or a hospital that billed a day long stay when the patient was discharged to rehab I the morning, for example.


    • Thank you. We must differentiate between out and out fraud, which will always require police work, and the billing problems necessarily associated with third-party payment.

  3. Big Truck Joe says:

    John, I agree wholeheartedly. It just seems to me that the Govts investigational resources are being wasted on billing miscues instead of going after real criminal fraud. I always get a little chuckle when I see all the False Claims Acts nailing hospitals and doctor offices throughout the country who are doing the best they can with the intricate billing policies that often require Steven Hawking like interpretive minds to figure out and then some guy just off the boat from Paraguay opens a DME store, fraudulently bills $3 million dollars in his first year of operations, and then flees the country when he finally gets a recoupment letter from CMS. The solutions are obvious but the political will to do anything about them are not.