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Florida Strike Forces Lead Nation in Crackdown

In mid-October, the Medicare Fraud Strike Force struck again. The scheme of such scope and sophistication that “puts the traditional Mafia to shame,” involved 73 people nationwide who were charged with the largest-ever Medicare scam by a singular criminal enterprise, said U.S. Attorney Preet Bharara.

The labyrinth network of Armenians used 118 phantom healthcare clinics in 25 states and other tricks to bilk Medicare out of $163 million. Investigators were initially tipped off to the fraud after learning the identities of nearly 3,000 Medicare patients in upstate New York had been stolen via Social Security numbers and dates of birth, along with doctors’ identities. The fraudulent operation used patients’ names to submit faux bills for healthcare that was never given, including oddly billed medical services such as dermatologists giving heart exams, eye doctors billing for bladder tests, and obstetricians testing for skin allergies.

Since its inception in March 2007 in South Florida and continuing through its most recent expansion into Tampa, the Strike Force has obtained indictments of nearly 900 individuals and organizations that collectively have billed the Medicare program for more than $2 billion. Take-down operations have united law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies.

“Miami-Dade County is ground zero for Medicare fraud and abuse cases,” said Edye E. Palma, assistant special agent-in-charge (ASAIC) for the U.S. Department of Health and Human Services (HHS)-Office of Inspector General (OIG) regional office in Miami. “The majority of indictments in the Southern District of Florida charge defendants with conspiracy to defraud the Medicare program, money laundering, false claims, false statements, and receiving kickbacks.”

In addition, HHS’s Centers for Medicare and Medicaid Services (CMS), working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

“The Strike Force has been a truly collaborative team concept, and the key has been having a dedicated federal prosecutor for each Strike Force team,” said Palma. “I came from another office where that wasn’t the case and we had to go to the U.S. Attorney’s Office in that district and basically sell them our case. We’re very lucky. This setup has allowed us many accomplishments in combating and deterring healthcare fraud in South Florida. The cases keep rolling and the prosecutor is constantly with us.”

HHS Secretary Kathleen Sebelius, who along with U.S. Attorney General Eric Holder recently kicked-off the first Regional Health Care Fraud Prevention Summit in Miami, credited the new tools in the Affordable Care Act—stiffer penalties and better information sharing—with helping to “stamp out Medicare fraud and protect beneficiaries and the American taxpayer.”

In the last three years, Medicare fraud-related offenses have included criminal false claims, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of fraud schemes, including physical therapy and occupational therapy schemes, home healthcare schemes, HIV infusion fraud schemes, and DME (durable medical equipment) schemes.

“For several years, Strike Force focused on the most egregious healthcare frauds,” said Palma. “We tackled the HIV infusion fraud schemes and that activity diminished locally because Strike Force was making an impact. Then that fraudulent activity began moving to other areas because criminals thought they could get away with it for a while until we started following them. If you look at the statistics, DME activity has been huge for the last few years, and it’s gone down significantly this year. It’s also an indicator of our impact. Now we’re seeing an increase in mental health and outpatient rehabilitation facilities fraud.”

Many Medicare criminals are interconnected through friends and family members, with a significant number coming from outside the United States, such as the Armenians.

“Others come from Cuba and team up,” said Palma. “They continue to try to find holes in the system.”

During the Strike Force nationwide takedown in mid-July, then the largest to date, a high level of fraudulent DME activity was discovered in Louisiana. Here’s how that scheme worked: Perpetrators sent expensive motorized wheelchairs to Medicare beneficiaries who hadn’t ordered them, didn’t need them, and in many cases had simply stashed them somewhere when they arrived. In home after home of Medicare beneficiaries, ASAIC Bill Root, who has worked healthcare fraud cases since 1981, discovered unused wheelchairs in a number of unusual places, such as sitting in a corner of a living room with a potted plant in the seat.

“It’s really disheartening to visit these beneficiaries who were completely in the dark and had no idea that Medicare had paid $6,000 for something that someone else who didn’t qualify might actually need,” said Root. “Add to that, some doctors were getting referral fees of $500 per script for an unnecessary wheelchair. Some were writing 200 scripts a year. That’s sad.”
Palma pointed to pure, simple greed.

“Some doctors had no need to do it,” she said. “They weren’t blackmailed. They were just dirty doctors.”

Derrick Jackson, SAIC for the Atlanta region, which covers seven southern states, described common fraudulent billing practices for psychotherapy treatment for Medicare beneficiaries in senior citizen facilities.

“We’re finding in some of those cases that they aren’t licensed therapists,” he explained, “and also they’re basically providing games such as bingo, fishing trips, trips to the movies but billing Medicare for psychotherapy.”

Jackson encourages physicians to properly research companies that approach them with side business ventures.
“We see where legitimate doctors are working for hospitals and may sign an agreement to work for a pharmacist or a DME company,” he said. “They should do their due diligence to make sure these individuals are legitimate and actually providing the services they advertise, as opposed to just signing documents and getting paid for it.”

Florida is the only state with two Strike Force cities— Tampa and Miami. Only five other states have Strike Force cities—California, Louisiana, Michigan, New York and Texas. HHS-OIG plans to expand the Strike Force initiative to four more cities.

In Florida, even though data-driven Strike Force activity seems focused on Miami and Tampa, all parts of the state are being monitored, officials said, hinting that another take-down day may occur in early 2011.

For more information on the DOJ/DHHS Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative that includes Medicare Fraud Strike Force teams, visit http://www.stopmedicarefraud.gov.

Tags:

Affordable Care Act, Bill Root, Centers for Medicare and Medicaid Services, CMS, Derrick Jackson, DME, durable medical equipment, Edye Palma., Health Care Fraud Prevention and Enforcement Action Team, HEAT, HHS, HHS Secretary Kathleen Sebelius, HHS-OIG, Medicare Fraud Strike Force, Office of Investigations, Office of the Inspector General, OIG, U.S. Department of Health and Human Services

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