Lured by easier money, less violence, and shorter prison sentences, Mafia figures and other criminals are increasingly moving away from illegal drugs and into Medicare fraud. Medicare fraud is now the most profitable criminal enterprise in American, estimated to total about $60 billion a year, or about 10-15% of the total Medicare bill paid by the American taxpayer.
How does it work? 60 Minutes accompanied an FBI Special Agent in Miami to view one of thousands of sham clinics, pharmacies, and medical equipment supply stores that dot the low-rent strip malls. And no one is every inside: no clerks, nurses, or patients. These operations get an occupational license, forge a doctor’s prescription pad, and pay to obtain the names and ID numbers of legitimate Medicare patients from another illegal industry that steals lists from doctors’ offices or hospitals. Once these crooked companies have patient lists, they bill all sorts of outlandish charges and submit them for payment, knowing the Medicare is required by law to pay the claims within 15-30 days and that it only has enough auditors to check a tiny fraction of charges.
And by the time patients receive statements and report that Medicare paid for equipment that they never ordered, never wanted, and never received, these illegal companies have shuttered their doors and have moved on to create another sham operation. It is estimated that Miami has 2,000-3,000 medical equipment companies and that only 5% of these companies are legitimate.
Attorney General Eric Holder says that the problem is due to limited resources for oversight. For example, South Florida has only three field inspectors to check up on thousands of questionable medical equipment operators.
The Obama administration is providing Medicare with an additional $200 million to fight fraud as part of the recent stimulus package, and billions of dollars to computerize medical records and upgrade networks. I certainly hope that we can capture this money to help fund health care reform!
For the accompanying article from CBS, see here:
http://www.cbsnews.com/stories/2009/10/07/national/main5368454.shtml Have you heard anything about the Mafia getting involved in Medicare fraud? What do you think about it?
Comments (4)
Wow. That really sucks.
Yikes . . . and I work for Medicare (as a claims adjudicator).
I've never heard about this before, but you know it doesn't surprise me. It even makes sense, when you mention that even if they get caught they get into less trouble and do less time than if they are dealing in illegal narcotics.
Wow. Never heard about it until now!