So You Think You Want Universal Health Care

Of the key topics of this presidential election, health care is ranked at least second in level of importance to the voter according to my casual man in the street quiz. I would include myself in that average too. Well until I saw a segment of Nightline on the MSNBC web site which aired on December 10th, 2007, on NBC Nightly News.

All information that follows is taken completely from their own investigation.
(See http://www.msnbc.msn.com/id/22184921/ )

Five million dollar wheel chairs, phony, and fraudulent perscriptions and phony arms are costing the already burgeoning Social Security Administration an estimated 60 billion dollars a year. And the majority of those clams are coming from south Florida, mainly Miami and Hialea, where the offices in question are located in densely populated Cuban areas.

Many of the offices sending in these phony claims are just an office and a phone, as FBI investigators discovered when they attempted to arrest the alleged perps. Dialing the phone number listed on the claim application, they stood outside the door and listened to it ring. Many of these offices are just a desk and phone and chair sitting in the middle of a ten by ten foot room.

The extent of fraudulent activity reads like a comedy of errors. But not a very funny one to the American tax payer losing benefits and experiencing cut backs. And a former defrauder said the Social Security Administration makes it all too easy and claims the government bureaucrats should bear at least part of the blame.


A woman receiving $150 in cash from a health care provider for signing a form for AIDS medications. Paperwork proved she had done this regularly for a long period of time.

“A recent report by the inspector general for the Department of Health and Human Services noted that 72 percent of the Medicare claims submitted nationwide for HIV/AIDS treatment in 2005 came from South Florida alone. That percentage is of great concern to authorities, since only eight percent of the country's HIV/AIDS Medicare beneficiaries actually live in South Florida, a clear indication that the level of fraud was, as one official put it, "off the charts."

“One of the most common schemes is the illicit billing for DME, or durable medical equipment, such as oxygen generators, breathing machines, air mattresses, walkers, orthopedic braces and wheelchairs. This scheme involves billions of dollars a year in illegal claims. Raul Lopez, the president of the Florida Association of Medical Equipment and Services and the director of a legitimate medical supply company, said the fraud is so widespread it hurts the many valid DME companies, which are struggling to compete.

Unlike real DME companies, which have showrooms, warehouses, public offices, trained staff and professional record-keeping, the fraudulent companies are usually shell companies with shadowy business practices, hidden owners, and tiny, locked offices which are only there to create the illusion of legitimacy. They rarely have any medical products for actual sale or delivery.
"They're lined up in hallways one after the other, office after office with a locked door, no foot traffic, no employees, no medical equipment," said Ogrosky. "We're talking about billing that goes up in the tens of millions of dollars for places that don't exist."
FBI agents looking for suspected front-companies that Medicare records show are actively billing rarely find much to search. "We often don't see places. We find vacant lots, we see mailboxes, we see an office suite shared by 30 companies. We're not finding legitimate companies where we can go in and do a search warrant," said Delaney.

On a recent trip to some shopping centers and office buildings in the Miami area, FBI agents Brian Waterman and Christopher Macrae knocked on the doors of several purported medical supply companies. Most of the offices were locked during business hours, with no signs of any activity. Calls to the offices went unanswered.
Referring to one of the closed offices, Waterman said, "The amount of money in dollars that this company is billing for in the last month are close to a half million dollars. We're just trying to find out what they're billing for and what they're doing."
Across the street, in another small office complex, the agents found another six supposed supply companies that also were locked. "Building's closed, kinda tough to deliver stuff out of here," Macrae noted. "It doesn't surprise us at all. This is typical."
“To show just how bad it can be, federal officials in Miami pointed to a red electric wheelchair they seized from an illicit company. Normally it would cost about $5,000. But by billing Medicare over and over, nor ever delivering the wheelchair to an actual patient, criminals charged a total of $5 million for that one item alone.”


Read your EOBs

“When he got his Medicare EOB, or explanation of benefits, Davis couldn't believe his eyes. "I was amazed. I looked at it and thought this has got to be a mistake."
“After alerting the U.S. Attorney's Office in Miami, Davis received a visit from two FBI agents, who took pictures of his arms to prove they hadn't been amputated. They told Davis his case was part of a huge scheme involving dozens of illicit companies. "It's just outrageous," said Davis. "You just think of the money being lost. It is millions and millions of dollars."
“Short- and long-term schemes with complicit patientsLaw enforcement officials said most Medicare fraud can be divided into two time-frames. One technique involves a quick hit where the practitioners set up their companies, bill Medicare for a while and then quit, usually within the 90 to 120 days it takes for many of the more obvious frauds to be detected.
"They get in, they open up a corporation, they bill, they shut it down, and they move on and they open up another corporation," complained Delaney. "By the time the computer processes the claim and there's data for us to dive into, that money's already been paid."
“The companies are often set up using straw purchasers and fictitious or "nominee" owners who have nothing to do with running the actual scheme. One purported medical company CEO actually turned out to be an employee of an auto tire store who had been paid by fraud organizers so they could use his name on the corporate records.
"We've actually seen where they recruit this nominee or store buyer/owners from another country. They pay them for the sole intent of opening up corporations, businesses, bank accounts in their names, and they get the other half of the payment when they go back," said Delaney.
“The second technique involves a more lucrative and long-term fraud, which is much more complex and requires the complicity of doctors and patients in order for the billing scheme to continue without the authorities being alerted.
"The office manager, the doctor, the patient, and the patients' families often know what's going on. It runs the entire spectrum," said Delaney, the FBI supervisor.
"We are up against an organized foe.”
“Homemade medicines sold to the publicOne of the most disturbing schemes, law enforcement officials said, involved the formulation or "compounding" of homemade aerosol respiratory medications for which Medicare was billed for hundreds of millions of dollars, along with the costs of the machines supposedly used by patients to inhale the drugs.
"These aren't real drugs, they're being whipped up in the back of pharmacies," said Ogrosky. "One of the independent pharmacies that was whipping up medicine had people making the medicine that were not at all qualified." One of those people, he said, was actually an air-conditioning repairman, who was making medicine that was "disseminated to thousands of patients."
“A problem for law enforcement officials is that as soon as they catch on to a certain phony drug, the illicit medical providers concoct something else for which to bill. "We and the Medicare program catch on to the fact that they are abusing that drug, so we clamp down," Delaney said. "They switch to another form of therapy that isn't being looked at so closely."

Please read the entire story and watch the accompanying video clip for yourself to feel the impact of this investigation. I would keep an eye on this ongoing investigation. Contact your congress person’s office to get some heat on the problem. I’ll leave you with this response from the Centers for Medicare and Medicaid Services.
“Response to Medicare fraud report
Official response from The Centers for Medicare and Medicaid Services
updated 8:06 a.m. CT, Thurs., Dec. 13, 2007
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Below is the official response to the Medicare fraud from The Centers for Medicare and Medicaid Services, which administer the program. (Nightly News received this after the two reports had run on-air.) The response in full:
"HHS and CMS continue to aggressively target DME fraud on several levels and it remains a top priority. It is appalling that some seek to steal from a program intended to help millions of people, including some of our country’s most vulnerable citizens.
In addition to implementing stringent enrollment standards and background checks to ensure the legitimacy of suppliers billing Medicare, CMS is also conducting more frequent site visits to ensure supplier compliance with Medicare rules and tougher quality standards.
Along with state and other federal partners, HHS has significantly enhanced its efforts to identify fraudulent billings and prevent those billings from recurring. CMS has also launched a DME demonstration project in South Florida intended to test tougher enrollment criteria and a mandatory surety bond regulation will further enhance HHS’ ability to detect this type of fraud and work to deter it before it occurs.
Beneficiaries can do their part by carefully reviewing their Medicare billing statements and protecting their beneficiary numbers. CMS has been educating beneficiaries across the country about the importance of safeguarding their benefits.
Finally, we look forward to working with the Congress to gain expanded funding for our anti-fraud efforts."”