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Pervasive Medicare Fraud Proves Hard to Stop

#1 User is offline   hukildaspida 

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Posted 21 August 2014 - 04:58 PM

Pervasive Medicare Fraud Proves Hard to Stop

By REED ABELSON and ERIC LICHTBLAUAUG. 15, 2014



http://www.nytimes.c...es-elusive.html

BALTIMORE — The ordinary looking office building in a suburb of Baltimore gives no hint of the high-tech detective work going on inside. A $100 million system churns through complicated medical claims, searching for suspicious patterns and posting the findings on a giant screen.

Hundreds of miles away in a strip mall north of Miami, more than 60 people — prosecutors, F.B.I. agents, health care investigators, paralegals and even a forensic nurse — sort through documents and telephone logs looking for evidence of fraudulent Medicare billing. A warehouse in the back holds fruits of their efforts: wheelchairs, boxes of knee braces and other medical devices that investigators say amount to props for false claims.

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The Obama administration’s declared war on health care fraud, costing some $600 million a year, has a remarkable new look in places like Baltimore and Miami. But even with the fancy computers and expert teams, the government is not close to defeating the fraudsters. And even the effort designed to combat the fraud may be in large part to blame.


An array of outside contractors used by the government is poorly managed, rife with conflicts of interest and vulnerable to political winds, according to interviews with current and former government officials, contractors and experts inside and outside of the administration. Authority and responsibilities among the contractors are often unclear and in competition with one another. Private companies — like insurers and technology companies — have responsibility for enforcement, often with little government oversight.

Fraud and systematic overcharging are estimated at roughly $60 billion, or 10 percent, of Medicare’s costs every year, but the administration recovered only about $4.3 billion last year. The Centers for Medicare and Medicaid Services, which is responsible for overseeing the effort, manually reviews just three million of the estimated 1.2 billion claims it receives each year.

“It’s pretty dysfunctional because the contractors don’t communicate with each other,”
said Orlando Balladares, a fraud investigator who has worked for both the government and private firms.

Dr. Shantanu Agrawal, who oversees Medicare’s antifraud center, the Center for Program Integrity, said the administration had made fighting fraud a top priority.

“The focus is higher than it ever has been,” said Dr. Agrawal, an emergency medicine physician and former McKinsey consultant who took the Medicare job this year. But even some of the administration’s successes shed light on the crackdown’s limitations.

So-called recovery audit contractors, hired to reduce hospital overbilling, have an unparalleled record of returning money to Medicare, accounting for $8 billion in returned money since 2009. But hospital resistance to the contractors and an overburdened appeals process have largely stopped the recovery efforts.

“They’ve been brought to a halt by their very success,” said Marsha Simon, an expert on health policy and legislative strategy in Washington.

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Just this summer, Medicare shut down a successful hotline in fraud-plagued South Florida, saying it was no longer necessary. The hotline is credited with leading to more than 1,000 fraud investigations and identifying tens of millions of dollars in questionable payments in the last five years. Trained staff members hired by an outside contractor answered calls and passed relevant tips to investigators within 48 hours.

Calls are now being routed to a general Medicare number, where it can take months for a complaint to be addressed, according to the most recent evaluation of the program.

The Obama administration has allocated much of its antifraud money to traditional efforts, including nine federal strike forces that coordinate responses among different government agencies. Earlier this year, for example, teams in Miami, Brooklyn, Detroit and elsewhere announced charges against 90 people accused of a total of $260 million in fraudulent billings.

But the biggest role goes to a network of private contractors that has always been a distinguishing feature of Medicare’s operation and sets it apart from so many other huge federal bureaucracies. From its inception in 1965, the program has relied on private insurance companies to handle claims from beneficiaries.

The acronyms by which the contractors are known internally are almost a parody of bureaucratic entanglement. Claim payments are handled by Medicare administrative contractors, or MACs, which are generally divisions of private insurers like WellPoint. Recovery audit contractors, or RACs, concentrate on overbilling rather than outright fraud. They include CGI Federal, the same organization that was criticized for its work on HealthCare.gov.

Medicare also employs zone program integrity contractors, known as the ZPICs (pronounced ZEE-pix), that specialize in fraud. They include a unit of Hewlett-Packard and a division of Blue Cross of Alabama. Even the contractors have contractors to oversee them. And UPICs (YOU-pix), which represent the combination of fraud contractors specializing in Medicare and Medicaid, are coming.

The decision to outsource major responsibilities has been a longstanding source of frustration even to many of the agency’s officials. Ted Doolittle, who worked as a deputy director at the Center for Program Integrity and left in April, described fighting fraud through contractors as being “almost reduced to working with a puppet. You’re working the strings above.”

Former and current law enforcement officials and people who have worked with the contractors say there is little sharing of information among the companies or even with the government.

The recovery audit contractors, for example, do not report to the Center for Program Integrity but to another division within Medicare. When they pass on evidence of possible fraud, a rare occurrence, Medicare often fails to follow up, according to a report by the Office of the Inspector General.

Because they are paid on a contingency basis, ranging from 9 to 12.5 percent of the improper billing that they find, recovery audit contractors have been criticized by hospitals as little more than bounty hunters. The high number of hospital appeals has helped create a backlog of an estimated two years for an administrative law judge to hear a disputed case. After Congress halted some of the audits, Medicare suspended the program until new contracts were awarded. This month, because the awards are delayed, the agency began to allow a limited number of reviews.

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The integrity contractors have also been criticized, in part for their ties to the companies responsible for paying claims, creating a significant potential conflict of interest, according to a government report released in 2012. The report also faulted Medicare for not having “a written policy for reviewing conflict and financial interest information submitted.” Medicare officials say appropriate procedures are in place, and that the contractors are investigating providers, not the organizations paying claims.

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Recent Comments
Keith
4 days ago

The article says service providers complain about the contractors acting like "bounty hunters", but if a person supports "free market"...
Keith
4 days ago

Upon what is the fraud amount estimate based if it requires so much investigation to find people committing fraud?
EJZimmerman
4 days ago

But, of course, we patients are blamed for high costs. Opponents don't want to stop the fraud, they want to stop the Medicare. And, don't...

See All Comments

Last October, a federal Government Accountability Office report faulted Medicare for its lack of oversight, such as not directly rewarding the contractors for helping meet agency goals like aiming at high-risk providers. A new report released this month did the same.

Dr. Agrawal says Medicare is adopting suggestions like these, and he says the agency has improved in setting priorities for its contractors.

Medicare officials also say the new fraud prevention system is a critical way to centralize efforts. In a recent demonstration of how the system works, Medicare officials used the example of an ambulance company in Texas suspected of improperly billing for services. Using a complicated set of formulas, the system was able to identify the company and send an alert to the fraud contractor. The alert assigned a priority level to the case and allowed the contractor to see what kinds of behavior it should be looking at. Within months, Medicare was able to stop payments to the company.

It was an example of stopping “the bleeding from the dollars going out the door,” said one Medicare official, whose name was withheld because only Dr. Agrawal was authorized to speak on the record for the Medicare antifraud center. The company had been paid $312,000 in 2012, before the software that targeted ambulance services was put in place, and billed just $1,800 in 2013 before Medicare was able to stop payments.

Dr. Agrawal acknowledged that some of the leads being generated may have already come to the attention of investigators, but the alerts “give them a significant head start.”

These kinds of alerts are generated by computer daily. But whether the system truly has been successful in fighting fraud remains unclear.

Trying to review the system after its first year, the Office of Inspector General said missing, inconsistent and possibly inaccurate information made it impossible to know whether there were any savings. In a second report, in June, the office said it could verify only $54 million in savings from the new computer system, even though Medicare said it had identified $211 million. A quarter of that amount was actually recovered, according to the Office of Inspector General report.

Medicare says the new system “is successfully doing its job of pointing the spotlight on bad behavior and prioritizing the most egregious situations for investigation.”

Senator Orrin G. Hatch, Republican of Utah, is among those in Congress who have been skeptical of the system’s effectiveness. “It is concerning that they have only found $54 million in adjusted savings in its second year,” the senator said. “There is a difference between simply identifying waste and actually taking steps to prevent and recover it.”

A version of this article appears in print on August 16, 2014, on page A1 of the New York edition with the headline: Pervasive Medicare Fraud Proves Hard to Stop. Order Reprints|Today's Paper|Subscribe
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#2 User is offline   hukildaspida 

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Posted 29 August 2014 - 04:19 PM

Does anyone know who the "FORMER NEW ZEALAND NURSE TURNED U.S. FEDERAL PROSECUTOR (that)PUT THE OWNER BEHIND BARS FOR 27 YEARS.' is?

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Health care schemes bilked taxpayers for tens of millions
Published On: Aug 15 2014 10:32:14 PM CDT Updated On: Aug 15 2014 11:31:13 PM CDT

http://www.click2hou...llions/27517802

Aug. 15, 2014: Federal prosecutors say tens of millions of taxpayer dollars are wasted each year on fraudulent Medicare and Medicaid payments made to health care professionals. Jace Larson reports.


Transcript

ORDINANCE UNTIL AFTER THIS TRIAL IN JANUARY. "LOCAL 2" INVESTIGATES OFTEN UNCOVERS OUTRAGEOUS EXAMPLES OF TAXPAYER WASTE. BUT TONIGHT'S STORY MIGHT TAKE THE CAKE. WE FOUND HOUSTON MEDICAL PROFESSIONALS CONVICTED OF STEALING $60 MILLION AND WE'VE GOT "LOCAL 2"'S JACE LARSON NOW WHO IS REVEALING MORE ON THE CASES OF TAXPAYER FRAUD THAT WILL LEAVE YOU FUMING. Reporter: YOU'RE WATCHING A CLINIC'S WAITING ROOM WITH PEOPLE WHO AREN'T REALLY THERE FOR TREATMENT. WHEN I FIRST RECEIVED INFORMATION FROM THE F.B.I. ABOUT THIS CASE, I KNEW STRAIGHT AWAY THAT IT WAS A VERY BIG, VERY SERIOUS CASE. Reporter: THE OWNER OF CITY NURSING SERVICES BILLED TAXPAYERS FOR $30 MILLION. THIS WEEK WE FOUND THE OLD OFFICE ON BISSONNET AND SOUTHWEST HOUSTON TRASHED, PATIENT FILES STILL SITTING INSIDE. THE OWNER PAID PEOPLE TO SHOW UP HERE SO HE COULD BILL MEDICARE FOR THEIR PHYSICAL THERAPY. THERE WAS NO PHYSICAL THERAPIST. NOBODY DOING PHYSICAL THERAPY. THERE WERE PATIENTS, MEDICARE BENEFICIARIES SIGNING THESE BLANK DOCUMENTS THAT THE DEFENDANTS WERE FILL NOT GUILTY TO MAKE IT LOOK LIKE PHYSICAL THERAPY. Reporter: SOON THE FEDS CAUGHT ON. FORMER NEW ZEALAND NURSE TURNED U.S. FEDERAL PROSECUTOR PUT THE OWNER BEHIND BARS FOR 27 YEARS. WHEN IT COMES TO HEALTH CARE FRAUD, HOUSTON RANKS AMONG THE WORST CITIES IN THE WHOLE COUNTRY. EACH YEAR PROSECUTORS BILL UP TO TENS OF MILLIONS OF DOLLARS IN FRAUD AND THEY KNOW THEY'RE ONLY GETTING A FRACTION OF IT. TAXPAYERS REALLY SHOULD BE FRUSTRATED. Reporter: THE HEAD OF THE MEDICAID FRAUGHT DIVISION ESTIMATES A STAGGERING 10% OF MEDICARE AND MEDICAID MONEY GOES TO HEALTH CARE PROVIDERS WHO LIE TO GET CASH. ARE YOU EVER ABLE TO GET THAT MONEY BACK FOR TAXPAYERS? SOMETIMES THE MONEY HAS GONE INTO ANOTHER COUNTRY AND WE CAN NOT GET IT. BUT THE MONEY THAT THEY HAVE HERE, WE DO. WE FOLLOW THE MONEY AND LOOK AT THEIR BANK ACCOUNTS AND WHAT ASSETS THEY HAVE AND TRY TO GET BACK AS MUCH MONEY AS WE CAN. Reporter: THAT'S WHAT HAPPENED TO THE HUSBAND AND WIFE DOCTORS WHO LIVED INSIDE THIS NICE KEMAH HOUSE. HE WAS KNOWN IN THE COMMUNITY AS A PILL DOCTOR. Reporter: THE TWO DOCTORS ARE NOW IN ANOTHER BIG HOUSE. YOU AND I PAID THEM $62 MILLION FOR INTENSIVE PEOPLE INJECTIONS LIKE THIS. THE DOCTOR TOLD INVESTIGATORS HE DID THEM HERE. HE HAD A LITTLE SHOT TRAY THAT HE CARRIED WITH HIM AND HE'D HAVE THEM BEND OVER, ASK THEM WHERE DOES IT HURT AND HE WOULD JUST BASICALLY GIVE THEM A VERY SUPERFICIAL SHOT. Reporter: HE GOT ON THE FEDS' RADAR WHEN HE STARTED GETTING REALLY, REALLY BUSY. HE CHARGED MEDICARE FOR SEEING 279 PATIENTS IN JUST ONE DAY. THAT'S SEDATING AND INJECTING ONE PATIENT EVERY TWO MINUTES FOR EIGHT HOURS. IS IT POSSIBLE FOR ONE DOCTOR TO TREAT 270 SOME PEOPLE IN A DAY? NOT IN MISPEN. Reporter: INVESTIGATORRED FOUND MONEY STASHED INSIDE THE HOME AND ANOTHER 800,000 IN SAFETY DEPOSIT BOXES. AND WHO WOULD TAKE ADVANTAGE OF THIS DISABLED PERSON? MEDICAID GOT BILLED FOR AN EXPENSIVE SPECIALIZED WHEELCHAIR, BUT THE PATIENT WAS REALLY GIVEN THIS FROM THE MEDICAL COMPANY'S OWNER. SHE WAS PROVIDING THEM SOMETHING CHEAP AND BILLING FOR SOMETHING EXPENSIVE SO SHE GOT A HIGHER REIMBURSEMENT. LIKE THE OTHERS O'CLOCK THE DEFENDANT IN THIS CASE IS NOW SITTING IN PRISON. WE ARE COMMITTED TO WATCHING OUT FOR TAXPAYER ABUSE AND WASTE. IF YOU'VE GOT A STORY IDEA FOR ME, TELL ME ABOUT IT ON MY FACEBOOK PAGE.
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#3 User is offline   hukildaspida 

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Posted 04 September 2014 - 05:00 PM


Health care schemes bilked taxpayers for tens of millions

Taxpayer dollars wasted each year on fraudulent Medicare, Medicaid payments made to health care professionals
Author: Jace Larson, Investigative Reporter, [email protected]
Published On: Aug 15 2014 10:15:00 PM CDT Updated On: Aug 15 2014 11:31:18 PM CDT


http://www.click2hou...llions/27515748

HOUSTON -

Federal prosecutors say tens of millions of taxpayer dollars are wasted each year on fraudulent Medicare and Medicaid payments made to health care professionals.


"Taxpayers really should be frustrated," federal prosecutor Jennifer Lowery said. Lowery is the chief deputy of program fraud at the U.S. Attorney's Office in Houston. "You don't ever get all of the money back."

In April, a judge sentenced Yolanda Nowlin, of Bryan, to federal prison for 11 years after she was convicted of health care fraud conspiracy.


Nowlin ran two medical-equipment supply companies and submitted claims to Medicare and Medicaid for equipment that wasn't delivered.


In one case, a severely disabled woman who needed an expensive, specialized wheelchair was given a traditional wheelchair even though Nowlin billed Medicaid for the more expensive one.

"She was providing (patients) with something cheap and billing for something expensive so she got a higher reimbursement," federal prosecutor Adrienne Frazior told Local 2 Investigative Reporter Jace Larson.

Umawa Oke Imo was convicted in 2011 of stealing $30 million.
He operated the now-closed City Nursing. At his trial, employees testified about how City Nursing billed Medicare for treatment that was not provided, including treatment for numerous people who were dead when the treatment supposedly took place.

Oke paid people who received Medicare to come to his office and sign blank treatment forms indicating they received physical therapy.

"There was no physical therapist. Nobody was doing any physical therapy," federal prosecutor Julie Redlinger told Local 2. "One lady testified she was on the train. She got asked if she wanted to make some money and if she had a Medicare card. Another lady testified that a man came by her house and asked if she wanted to make some money to go see a doctor."

Local 2 found the former City Nursing office on Bissonnet in Southwest Houston unlocked. The office appeared trashed. A few patient files were on the floor along with several documents with City Nursing's header.

Oke received 27 years in prison.

A husband-and-wife team of doctors raked in $62 million when they billed Medicare, Medicaid and private insurance companies for pain injections that didn't really take place.

Drs. Kiran and Arun Sharma also received prison sentences.

"He was known in the community as a pill doctor," federal prosecutor Al Balboni said.

They gave superficial injections to patients, but they falsely billed for major joint and spinal injections.

"He was never doing what he was claiming," Balboni said.

He said during the time of the scheme, the Sharmas' practice increased the number of patients it claimed to see. In 1998, they saw an average of 50-60 patients a day.

That jumped to more than 100 a day in 2003, Balboni told Local 2.

On Jan. 6, 2005, the Sharma practice claimed it saw 279 patients.

Balboni said it is impossible for a doctor to give major injections to that may people in one day.

Asset forfeiture:

Prosecutors go after lost taxpayer money, but rarely recover all of it.

"Sometimes the money goes to another country and we cannot get it. But we follow their bank accounts and see what assets they have, and use forfeiture laws to try and get the property back," said Balboni.

In the Sharma case, investigators found $700,000 in cash inside their luxury, waterfront Kemah home and $800,000 in two safety deposit boxes.

The government seized and sold their $700,000 home in Kemah.

Have a story idea for investigative reporter Jace Larson? Email him or send him a message on Facebook.
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