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Busting Medicare Fraud

Criminals Bilk Medicare of Billions Each Year

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WANTED: They stole billions from Medicare — and they're still at large.

Miami vice

The nation’s first federal Medicare fraud strike force hit the ground in Miami two years ago—with agents from the FBI and investigators from the Department of Health and Human Services’ Office of Inspector General, as well as federal prosecutors. Altogether, the strike force and the southern Florida U.S. Attorney’s Office indicted 197 suspects in 2007, almost doubling Medicare fraud prosecutions.

In one Miami case alone, the team charged 16 people with orchestrating a $101 million fraud involving phony bills for medical equipment that Medicare patients neither needed nor received. Now, strike forces are operating in Medicare fraud hot spots like Los Angeles, Detroit and Houston, and officials say more cities will be targeted later this year. The scams are many, varied and spreading.

The Houston strike force, for example, shut down clinics billing Medicare for $3,000 “arthritis kits” that were only heating pads and knee and shoulder braces. A $16 million bust last July netted 32 doctors and executives. Some of the clinics, prosecutors charge, also were billing for liquid food supplements for patients who were deceased.

Since 2007, the strike forces have indicted nearly 300 defendants who allegedly stole $680 million, according the U.S. Department of Justice. Sentences range from two to 15 years, with one doctor receiving 30.

Half of those defendants were arrested in Miami—the Medicare fraud capital of the nation. Schemes hatched there are perfected, then exported to other parts of the country.

“We know the fraud is viral and spreading to other communities,” says Kirk Ogrosky, deputy chief of the Justice Department’s criminal fraud section, who coordinates the strike forces.

Take the case of the two Miami men who allegedly set up a chain of about 40 clinics—with names like Fast Cure Company—in Florida and then four other states. Prosecutors contend the two men ran a ring that bilked Medicare out of $100 million for therapies—never administered­—for cancer, HIV and other illnesses. Investigators found some of the “clinics” were empty storefronts with hand-lettered signs; others were post office boxes.

Scammers obtain Medicare numbers by buying or stealing them from doctors, clinics or patients. Ogrosky says that once a “professional” patient sells his Medicare number, it can be reused again and again—or sold to others cheating the system.

Just one Medicare number—in the wrong hands—tricked Medicare into paying more than $1.1 million for phantom treatments. Alexander McCray of Miami paid for his crack cocaine habit by helping dozens of clinic operators file false claims for phony HIV infusion treatments billed in his name.

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