Medicare Fraud Exposed: CBS’s 60 Minutes Story Claims $60 Billion Annually in Medicare Fraud

With the health care debate in full swing, CBS's 60 Minutes television program recently aired a story in which it claims that Medicare fraud is now a $60 Billion dollar a year crime (I capitalized the "B" in billion to emphasize the enormousness of this number). It is utterly unbelivable. You can view the story as it aired in the video below:

The Medicare program, which now servers about 46 million senior and disabled American citizens, has become an easy and incredibly profitable target for criminals.

According the the 60 Minutes story, Medicare fraud is now a more popular crime in the city of Miami than Cocaine drug dealing among criminals. This is due to lighter prison sentences, lesser law enforcement on their trail, the non-violent nature of the crime and the high profitability and simplicity of the scheme.

In the story, 60 Minutes correspondent Steve Kroft rode along with law enforcement in the city of Miami and found Medicare contracted business after business who had charged Medicare for thousands or millions of dollars in inventory, but were basically vacant buildings with no sign of ownership or customers. The assumption was made that these businesses truly had no customers. They were simply billing Medicare using stolen patient information and collecting the money without providing any medical equipment or services.

As a matter-a-fact, most of these businesses were in the middle of warehouse districts where elderly or disabled consumers would rarely go.

Later in the story, Kroft interviewed an anonymous former Medicare Miami-area fraudster who is now serving a 12 year federal prison sentence. In the segment, he was simply referred to the man as "Tony".

Tony told Kroft that he stole about $20 million dollars from American taxpayers through Medicare fraud. He said it was ridiculously easy to do and that he is not a criminal mastermind. He actually estimated there were 2000 to 3000 or even more criminals in the Miami area alone working Medicare fraud schemes. (Please note: this problem is not relegated to Florida. The FBI has busted Medicare fraud rings in Detroit, LA and many other cities across the country).

Tony also said he normally purchased information about real Medicare recipients for about $10 each and then used this information to complete false invoices and claim forms and then wait 2-4 weeks for the direct deposit to hit his bank accounts. He said he commonly purchased 1,000 or even 10,000 of these real Medicare recipients information at a time. That's how profitable the data was to him.

Tony said he normally sorted through Medicare materials to find the most expensive items to bill for. These items included prosthetic arms and legs, electric arms, power wheelchairs and more.

Later in the story, Kroft interviewed a woman who runs Medicare's fraud prevention department. She said that due to low resources and legal issues, Medicare is simply not able to stay ahead of the problem like it would like.

According to the Medicare website, if you feel you are a victim of Medicare fraud you are supposed to either call the Medicare claims processing company or complete an online form providing the following data from your Medicare Summary Notice (MSN) Form:

• The provider's name and any identifying number you may have.
• The item or service you are questioning.
• The date on which the item or service was supposedly furnished.
• The amount approved and paid by Medicare.
• The date of the Medicare Summary Notice.
• The name and Medicare number of the person who supposedly received the item or service.
• The reason you believe Medicare should not have paid.
• Any other information you may have showing that the claim for the item or service should not have been paid by Medicare.

The frustrating thing is that even if you do this, the fraud is not guaranteed so stop. In the news segment, Kroft interviewed Clara Mahoney, a 76-year old Medicare fraud victim. She said she has been reporting suspicious and outright fraudulent items on her MSN since 2003. Items including air mattresses, wheelchairs and urine bags have been charged and she has never received any of the items. She said the fraud continues to this day (six years later) even though she has reported it many times and has requested that Medicare "flag" her account.

Another Medicare recipient, Ed Davis - a former federal judge, said he has been charged for two artificial limbs, even though both his arms work fine.

As frustrating as it may be, if you are a victim of Medicare fraud you should alert Medicare to any suspicious items on your statements and document any conversations or correspondence you have with Medicare. This will ensure you are not denied a claim at a later time for an item you legitimately need that was billed previously by one of these criminals.

Filed under: Fraud and Abuse

Tags: 60 minutes, medicare abuse, medicare crime, medicare fraud, medicare fraud and abuse