White Collar and Health Care: Medicare Fraud Increasing in Popularity

Federal investigators are finding that Medicare fraud schemes are flourishing throughout the country. The schemers range from small ad hac groups to elaborate networks operated by organized crime groups, including traditional La Cosa Nostra families and Russian mobsters. As more professional crime groups become involved, the stakes rise as do the probabilities of violence to silence witnesses or collect debts.

The typical scheme involves the billing of Medicare for medical equipment and/or drugs that patients never needed and never received. In essence, the scam is the fraudulent billing of Medicare for services. The scams require access to valid Medicare or social security numbers for the purported patients. There are three main methods of obtaining such numbers depending on the sophistication of the scammers. First is the simple extortion of the numbers from elderly people by force or threats. Second is paying homeless people for the use of their Medicare or social security numbers. Third, and most sophisticated, is the theft of numbers. The thefts are accomplished by either breaking into medical facilities to obtain the numbers or by hacking into the computers of such facilities to steal their patients' numbers. Not surprisingly, the organized crime groups are most likely to use the most sophisticated means to steal the identities.

Medicare fraud is growing at such a rate simply because it is so lucrative. The crime pays much better than crimes such as street level drugs sales or car theft. In addition, it is generally much less dangerous than those other types of crimes. Federal authorities estimate that some scams net the criminals tens or hundreds of millions of dollars in fraudulently obtained monies.

While generally safer than traditional street crime, the increased profits and attention paid by law enforcement is probably responsible for an uptick in violence within some schemes. The violence that does occur takes place within the criminal group and rarely touches the general public.

The federal government is focusing law enforcement efforts on Medicare fraud. In his health care address to Congress last month, the President promised hundreds of billions of dollars in health care cost savings from combating fraud and waste. Medicare fraud appears to be one fertile area for such savings.

For more on the subject, please see the following Associated Press article, http://www.google.com/hostednews/ap/article/ALeqM5gkMiV-gKQhCN626RwnoxQKm8eM7AD9B5OKO01