Medicare Fraud: Defying Justice

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were accused of charging Medicare for physical and occupational therapy never performed and HIV infusions — a treatment outdated for the last decade — that patients never received.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.