Monday, December 7, 2009

Health Care: Fraud Goes Viral throughout Country; Miami Is Epicenter

Medicare fraud has gone viral in cities throughout the United States. Investigators have found that criminals from particular ethnic groups have become extremely active in Medicare fraud scams. In various cities criminals from different ethnic groups are active in the fraud schemes. Investigators believe that viral patterns of crime occur in close knit ethnic communities because of the larger number of participants needed to carry out the scams.

Scams that have gone viral include false billing for wheelchairs and scooters, home health care, and infusion therapy (an older method of treating AIDS/HIV that has largely been supplanted by more successful drug "cocktail" therapies). A key to a successful Medicare fraud is the recruiting of Medicare recipients to take part in the scams. Elderly people often receive some remuneration for the illegal use of their Medicare numbers. In some instances, scammers have paid Medicare recipients a cash sum for the use of their Medicare numbers. In others the scammers have provided services such as housekeeping, which was billed as home health care. In still others Medicare recipients have received expensive electronic equipment such as large screen plasma televisions.

The problem of Medicare fraud in Miami is particularly acute. In 2008 Miami received approximately $500 million in Medicare home health care payments meant for the sickest patients receiving Medicare benefits. This sum was more than the rest of the country received combined. Miami received more than 50% of the benefits even though only about 2% of the country's Medicare home health care recipients reside in the city.

Many of the claims involve patients purportedly suffering with diabetes. In many cases scammers made claims for nurses to administer day and night insulin injections to patients who claimed to be blind because of the disease. Investigations have proved that in many cases the patients were not only not blind but did not even have diabetes.

Analysis of payments to Miami recipients showed that Medicare outlier payments for home health care related to diabetes in that city was eight times the national average. "Outlier payments" are those reserved for the extremely ill. They are for services such as occupational therapy and mental health services. Outlier payments can result in approximately double the amount of Medicare payments. Moreover, CMS does not limit the amount that it will pay a home health care agency for these services. While approximately 7% of all Medicare home health care payments are for outlier services, in Miami the percentage of outlier payments for home health care is 60%.

HHS and the Department of Justice have formed task forces throughout the country to combat the rampant growth of health care fraud. If the United States is to gain control of health care spending, it will have to make a major impact on the amounts lost to fraud.

For more information about the viral growth of Medicare fraud please see the Houston Chronicle website, December 6, 2009,, and The Miami Herald, December 7, 2009,

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