One of the ways the Obama Administration is trying to save money in Medicare is to aggressively address Medicare fraud. Four recent cases illustrate the amount of money involved and the schemes used to defraud the health care system designed to serve the elderly.
On April 23rd the suit was filed in the U.S. District Court in Manhattan against a pharmaceutical company alleging the company paid kickbacks to pharmacies to switch kidney transplant patients from competitors drugs to one of the company’s own drugs. Medicare paid for the high-priced medication. The allegations suggest 20 or more pharmacies were involved in the scheme.
On April 26 a federal jury in Los Angeles convicted a doctor and two others in a $1.5 million Medicare fraud scheme involving fraudulent prescriptions for power wheelchairs. A medical supply company paid kickbacks to the doctor for writing fraudulent prescriptions for durable medical equipment that patients did not need. The scheme was carried on from 2007 through 2012 and cost Medicare billions of dollars.
Recently a Brunswick, Georgia man pleaded guilty to his part in a Medicare fraud scheme run through a medical equipment company. Medicare was billed for $1.5 million in services never provided. The scheme involved stealing the identities of doctors in several cities and submitting claims on behalf of dead people. Sham businesses were used to launder the money.
In Florida the owner of a check cashing store was sentenced to 41/2 years in prison for his part in a Medicare fraud. He was involved in laundering millions of dollars that wound up in Cuba. Up to 70 south Florida medical companies falsely billed Medicare for medical equipment to the tune of $374.4 million. The owner of a medical equipment firm has been charged, and others are likely to be.
Medicare fraud costs the Medicare trust fund billions of dollars a year, and contributes to its negative cash flow. Medicare fraud, like insurance fraud generally, costs everyone who pays premiums. It has been projected that the Medicare trust fund will be depleted by 2024, unless changes are made. The level of fraud in the program contributes to this projection, so everyone in the Medicare system has an interest in stopping the fraud.
In the California case, in particular, the false claims were made on behalf of real patients who did not need the equipment ordered for them. Some of them were witnesses in the case, making a valuable contribution to stopping the fraud. While patients often do not know of false claims made on their behalf, and sometimes claims are made on behalf of fictitious patients, whenever one knows of fraud it should be reported. The official Medicare web site has a link for reporting fraud, as do many insurance company web sites and the official Health and Human Services web site. These sites also have tips for recognizing fraud, and offer rewards for information that leads to prosecutions. Remember, Medicare fraud is not just taking money from the government. It is taking money from all of us. Law enforcement professionals need to work hard to stop it, and they need the help of everyone who has knowledge of such schemes.