Government Cracks Down on Healthcare, Medicare Fraud

Throughout the United States, physicians and other healthcare professionals work together or with criminals on elaborate schemes. Their goal? Defraud the government and receive money for illegal Medicare and health claims. The efforts have netted the parties billions of dollars.

Recently, the government has fought back, most notably in 2009 with the introduction of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) task force. Workers affiliated with HEAT, a collaboration between the Department of Health and Human Services (DHHS) and the Department of Justice (DOJ), have been responsible for charging >670 people with attempts to defraud Medicare of >$1.3 billion. DHHS and DOJ also have a Web site (www.stopmedicarefraud.gov) that provides an overview of their efforts as well as news pertaining to the issue.

On July 1, DHHS took another step in addressing the problem with a new predictive computer modeling system to detect fraud and stop claims before they are paid. Instead of catching thieves after they steal, DHHS is attempting to identify questionable patterns or behaviors that indicate fraud. The Centers for Medicare & Medicaid Services is partnering with Northrop Grumman, National Government Services, and Verizon’s Federal Network Systems to implement the technology.

Funds from the Patient Protection and Affordable Care Act (ACA) are being used to pay for the system. According to DHHS, the ACA contains provisions that allocate $350 million over a 10-year period for healthcare fraud initiatives.

At a news conference in Philadelphia in mid-June, DHHS Secretary Kathleen Sebelius compared the system with a credit card company that detects suspicious charges, prevents them from occurring, and “can alert you to 12 flat-screen televisions being billed to your card from a town you’ve never been to,” according to the Philadelphia Inquirer.

The announcement occurred at a healthcare fraud prevention summit, the sixth such gathering since President Barack Obama introduced the series on June 8, 2010. Earlier meetings took place in Miami, Los Angeles, New York, Boston, and Detroit. Another summit is scheduled for later this year in Las Vegas.

Ms. Sebelius and Attorney General Eric Holder spearheaded the summits and were also responsible for creating HEAT, which includes operations in South Florida, Los Angeles, Houston, Detroit, Brooklyn, Baton Rouge, Tampa, Chicago, and Dallas that are focused on identifying and preventing Medicare fraud. DHHS and DOJ work with the US Attorneys’ office, the Federal Bureau of Investigation, and local, state, and federal law enforcement agencies.

The Medicare strike force was established in March 2007 in South Florida before expanding and receiving more funding thanks to the HEAT program. From its inception through the end of 2009, prosecutors involved in the strike force filed 244 cases against 456 defendants for allegedly billing $900 billion in false Medicare claims, according to the 2009 Health Care Fraud and Abuse Control (HCFAC) program annual report issued by DHHS and DOJ. Juries found 22 of the defendants guilty, while an additional 230 defendants pleaded guilty. In addition, 188 defendants were sentenced to prison for an average of 46 months.

The HCFAC’s 2009 report mentioned the federal government had won or negotiated approximately $1.63 billion in healthcare fraud judgments and settlements during the fiscal year, while the Medicare trust fund received $2.51 billion. In 2010, the Medicare trust fund, the US Department of Treasury, and other entities recovered >$4 billion in false healthcare claims made against government programs, according to DHHS. Agencies recovered $2.5 billion in fraud judgments and settlements in 2010, a >53% increase from the previous 12 months.

The prevention methods are continuing to pay off this year. In late June, a judge in South Florida sentenced 72-year-old Dr. Rene de los Rios to 20 years in prison for his part in a Medicare fraud scheme. The Miami Herald reported that Dr. de los Rios falsified documents for 2 Miami-based clinics that billed Medicare for $46.2 million for HIV therapy between 2003 and 2005.

The clinics received $19.7 million for unnecessary or unprovided HIV treatments. In turn, patients were paid for allowing the clinics to use their government-issued healthcare cards.

“[Dr. de los Rios] signed off and participated in a fraud of huge proportions,” US District Judge Joan Lenard said during the sentencing, according to the Miami Herald.

A few days later, a judge in Texas sentenced 50-year-old Sheena Shelton to 18 months in prison for defrauding Medicare and Medicaid between 2003 and 2009 while she ran a durable medical equipment supplier, according to a release from the US Attorneys’ office in the Eastern District of Texas.

With the new computer modeling system, government officials are hoping people such as Dr. de los Rios and Ms. Shelton will be caught before they receive payment for false claims.

“When a group of criminals creates a false front or sets up shop in a local clinic to submit fraudulent claims, they intend to blend in with thousands of other legitimate providers helping people in need,” Ms. Sebelius said in prepared remarks during her Philadelphia visit in June. “In the past, they could do this far too easily because our system wasn’t focused on distinguishing the fake from the genuine article. This made Medicare a ripe target and a lot of bad actors slipped through cracks. Today’s contract represents the greatest scrutiny ever applied to Medicare’s payments. Suddenly, it’s a lot harder for the rotten apple to blend in with the bunch.”