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Medicare Fraud: Defying Justice

Sweeping arrests are a show of force designed to send a message.

Medicare Fraud

Michael Dobrushin is one of 73 people charged by federal prosecutors in a scheme to cheat the Medicare system out of $163 million, according to U.S. authorities.
— Louis Lanzano/AP Photo

Federal agents rose before dawn on a muggy morning last summer, donning bulletproof vests as they prepared to surprise and arrest an established Miami physician. Armed with guns and heavy flashlights, they scaled a high stucco wall to enter the grounds of his sprawling two-story home, fanned out around the pool and house and waited; then several agents pounded on the door, shouting, "This is the FBI!"

Medicare is losing billions in fraud at the same time that an ever-increasing number of aging boomers will put intense pressure on the system.

The 56-year old doctor, Jorge J. Dieppa, was wanted on charges of taking bribes to provide hundreds of patient referrals to home health care agencies that then submitted about $19 million in phony claims to Medicare. The program paid almost $12 million to his alleged ring of scammers: six nurses, two patient recruiters and a Medicare beneficiary who received kickbacks.

Nothing out of the ordinary for Miami, the nation's capital of Medicare fraud, where medical equipment, physical therapy and other scams overseen by doctors, nurses and health company CEOs have been rampant for the past decade.

But outside Miami, dozens of other people also were charged with Medicare crimes that same summer day — in Brooklyn, N.Y.; Baton Rouge, La.; Detroit; and Houston — all part of the largest health care fraud takedown in the nation's history. More than 350 law enforcement officers arrested 94 suspects accused of trying to bilk Medicare of $251 million by billing the program for medical services and equipment that were either unnecessary or never provided.

News cameras caught the suspects as officials marched them off to jail. Some hung their heads or tried to cover their faces with jackets. One woman spit defiantly at the camera. Among other crimes, they were accused of charging Medicare for physical and occupational therapy never performed and HIV infusions — a treatment outdated for the last decade — that patients never received. Court documents revealed 3,700 claims for one woman during a six-year period.

For the Obama administration, the sweeping arrests were a "shock and awe" show of force designed to send a message that it means business about Medicare fraud. The day of the arrests, the administration held its first health-care fraud prevention summit in Miami, where U.S. Attorney General Eric Holder declared the government's goal is to "hammer people" who steal from the $500 billion program for older and disabled Americans. But that's a tough job. Medicare is now a magnet, not only for unscrupulous health care workers, but also for violent felons and mobsters, who consider cheating the system safer, easier and more lucrative than drug dealing.

And the estimated cost of their fraud each year? $60 billion.

The Justice Department, which launched the first Medicare fraud strike force with the U.S. Attorney's Office in Miami in March 2007, has expanded that law enforcement program to six other cities: Los Angeles, Houston, Detroit, Brooklyn, Baton Rouge and Tampa, Fla. The results so far include indictments of more than 800 defendants who submitted nearly $2 billion in allegedly bogus bills to Medicare.

The ultimate plan is to establish 20 strike forces — made up of hundreds of FBI agents and agents from the U.S. Department of Health and Human Services — that will be deployed around the country. "Our intention is to find people and put them in jail," Holder said flatly. After years of infecting South Florida's health care industry and then spreading out to other regions, Medicare fraud is finally a real priority in Washington.

Why this new urgency? Medicare is losing billions in fraud at the same time that an ever-increasing number of aging boomers will put intense pressure on the system. For this reason, the new health care reform law included tougher penalties for scammers and added $350 million to combat health care fraud over the next decade. The new law requires officials to use savings from Medicare — including stanching the flow of money lost to fraud — to strengthen the program and help pay for new Medicare benefits such as free screenings.

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