Feds root out $450 million in Medicare fraud

The latest crackdown on waste, fraud, and abuse has a big day.

By John Hayward
05/03/2012

On Wednesday evening, the Justice Department announced a “nationwide takedown of medical professionals accused of fraudulently billing Medicare out of nearly half a billion dollars,” as the L.A. Times reports:

The amount of bogus Medicare claims, totaling about $452 million, was the highest in a single raid in the history of a federal strike force combating rising fraud in the medical industry, according to the Justice Department. Arrests were made in seven major cities.

The Obama administration said it was toughening its attack on those who filed bills for ambulance rides never taken and medical procedures never provided.

In addition, officials in the Health and Human Services Department suspended or took other administrative actions against 52 medical providers after analyzing billing requests and finding additional “credible allegations of fraud.”

Among the accused are equipment providers who billed Medicare for equipment that was never purchased, a home health care outfit that allegedly ran a sophisticated operation to recruit phony “patients” to receive bogus prescriptions, and doctors who billed for services they never actually provided.

It was the biggest single day of Medicare fraud arrests in Justice Department history, with busts going down in L.A., Miami, Tampa, Houston, Baton Rouge, Detroit, and Chicago.  A total of 107 defendants were rounded up.

CBS News quotes deputy inspector general Gary Cantrell of the Department of Health and Human Services: “Medicare fraud also exposes some of our most vulnerable citizens to identity theft, and, in some cases, endangers patients’ lives.  The indictments announced today demonstrate that we’re fighting back.”

It’s great that we’re “fighting back,” but politicians have assured us they were “fighting back” for decades.  Few national candidates have been able to squeak through a campaign without vowing to save taxpayers a bundle by cracking down on “waste, fraud, and abuse,” usually mentioning Medicare as one of their top agenda items.

Medicare fraud is a perennial feature of Senator Tom Coburn’s (R-OK) annual “Wastebook.”  Coburn, who is a medical doctor, has estimated that 20 percent of every Medicare dollar is lost to fraud.  Today’s L.A. Times report says that $4.1 billion in fraudulent claims were recovered last year, and estimates the total value of Medicare abuse at between $20 and $100 billion per year.  That’s a remarkably wide gap between high and low figures, isn’t it?  The government can’t even tell us how big the problem is.

After years of bipartisan thunder against Medicare fraud, numerous legislative remedies, and assurances that each new Administration will run the tightest ship yet, the feds just rolled up half a billion dollars worth of fraud in a single day.  The officers and agents involved deserve congratulations for their efforts, but it’s still chilling to contemplate how huge and endemic the problem remains, after endless promises that the system can be fixed.

Senator Coburn, after proposing his Fighting Fraud and Abuse to Save Taxpayer Dollars (FAST) Act in 2010, said that “one of the biggest problems we face is providers and suppliers who are banned in one state, but then just jump to another,” something he would address by giving HHS greater information sharing abilities.  Today’s CBS News report includes a splendid example of such criminal persistence:

Among those arrested Wednesday were the owners of two community mental health centers in Baton Rouge, charged with billing $225 million in their scams. Hoor Naz Jafri and Roslyn Dogan allegedly recruited vulnerable patients, including elderly people, drug addicts and the mentally ill. Patient charts were doctored to show services that were billed to Medicare but often never given, according to an indictment.

Authorities suspended their companies in May 2011, but the pair continued billing Medicare after purchasing another fraudulent company, according to the indictment. When feds shut down that company, the pair tried to sell their “beneficiaries” to other providers in an attempt to keep making money.

During the investigation, federal authorities tried to put a hold on the company’s bank account. Dogan asked to visit the U.S. Attorney’s Office to review and copy documents that had been seized as part of a search. After the visit, “Dogan and co-conspirators bragged that, while pretending to copy files, they actually stole incriminating documents from the files and later destroyed them.” Dogan referred to herself as a “smooth criminal,” according to the indictment.

Another co-conspirator bragged to Dogan and others that he had a “bonfire with fabricated notes that law enforcement officers had failed to seize during the search,” according to the indictment.

(Emphasis mine.)  The ideal of a huge government program that can run without epic waste, fraud, and abuse is a dangerous illusion.  Waste and fraud are built-in features of Big Government.  Can anyone point to a bloated state or federal program that is not perpetually battling huge levels of abuse?  If Senator Coburn’s estimate of twenty percent lost to fraud is accurate, how far above average for federal social programs would that be?  Does it only seem far above average because of Medicare’s staggering size?

The other problem with these much-abused Big Government programs is that they plug into each other, forming an increasingly complex and bankrupt web that can never be unraveled.  The system is throwing sparks and heading for a total crash, but we don’t dare pull out a single blown fuse – not even one that was just installed by the previous Congress.  Case in point: the Associated Press reported Thursday that the Obama Administration is warning of “major unintended consequences for Medicare’s payment systems” if the Supreme Court strikes down ObamaCare.

Of course, such consequences did not trouble the Democrats when they were shoving ObamaCare down our throats in a rushed midnight vote on legislation none of them bothered to read.  But now that ObamaCare has utterly screwed up Medicare, we don’t dare repeal the former, because it would cause too much disruption in the insolvent social program we just busted 107 people for looting, to the tune of half a billion dollars.

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Categories: America, Democrats, Greed, Health, Money, Obama, People, White House | Tags: , , , , , | Leave a comment

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