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Meet a Medicare Fraudster's Worst Enemy

Data analyst Peggy Sposato has 'single-handedly saved taxpayers billions of dollars'

Peggy Sposato, Medicare Fraudster's Worst Enemy

photo illustration: John Ritter (photo: John Loomis)

Medicare fraud agent Peggy Sposato recently turned 75 and says she has no plans to slow down.

In the war against Medicare fraud, getting intelligence about the enemy has never been easy. Luckily, Peggy Sposato is on the case.

Sposato, a data analyst for the Justice Department, pioneered the use of Medicare billing data as a way of targeting people suspected of fraud. She was one of the first persons hired by the Medicare Fraud Strike Force, and over the years, her efforts have led to indictments and jail sentences of hundreds of people caught stealing from Medicare.

"Peggy single-handedly saved taxpayers billions of dollars," says Kirk Ogrosky, who headed the strike force from its inception in 2007 until he left for private law practice three years later. "She was our scout."

Sposato's transition to fraud buster began in the mid-1990s after a career as a geriatric nurse.

She got a job with the U.S. Attorney's Office in Miami in 1998, and for a decade analyzed medical records in whistleblower cases and worked hand in hand with prosecutors and agents as they cracked some of the first cases of Medicare fraud in Miami.

At Ogrosky's request, she moved to Washington in 2008, applying her data sleuthing on a national scale as the strike force expanded out of Florida.

Her sometimes voluminous requests for data were initially resisted by Medicare, citing privacy concerns. There were also technical issues to overcome because computers with the data often did not talk with one another. Sposato remembers being frustrated over the lack of access during a meeting with a regional Medicare billing contractor. She had just uncovered a case where a medical equipment supplier had gotten away with prescribing useless orthotics for arthritis patients.

"I was pleading with the contractor, asking, 'Why don't you people want to look at this stuff?' "

Besides mining data, Sposato has taught the basics of billing codes and medical charts to agents and prosecutors. "If you don't know what you are looking for, it is intimidating," says Ariel Rodriguez, a former federal agent who worked with her. "Peggy has this ability to make it simple."

Sposato would also help interview beneficiaries and establish that the services they were receiving were not medically necessary. She remembers a "lovely little old lady" who was getting lavish treatment from a home health care firm even though she was far from homebound. "The beneficiary is not aware of fraud. They just love the fact that somebody comes to visit them," Sposato says.

Ogrosky remembers the time that Sposato investigated a corner of the Medicare system that involved a payment pool designated for home health care. It was intended to cover extra charges for high-cost or complex cases. Sposato figured out that 95 percent of the pool's expenditures — $1.7 billion — was going to Miami-Dade County. Some shoe-leather work by federal agents soon turned up widespread fraud.

Her work has been noticed. Sposato won the prestigious U.S. Attorney General Award for Distinguished Service in 2008. She recently turned 75 and says she has no plans to slow down. "Nothing makes me happier than seeing a case I brought develop into an indictment and jail time," she says. "Medicare is taking a beating. I want the fraud to stop."