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.

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HIV and Medicare Fraud a Costly Combination

Medicare is an essential program that was designed to help the elderly and the vulnerable.  Presently, Medicare covers over 44 million people so that they can receive medical care.

Fraud has long been an issue regarding Medicare.  There have been too many loopholes, a system that is designed in a manner that makes fraud easy, and too little oversight of the billions of budget dollars intended for legitimate Medicare expenses. 

In addition, there have been – and still are – unscrupulous business people out there who have designed ways to defraud the Medicare system.  It is one thing to make a mistake, it is quite another to intentionally set up a business network for the express purpose of taking money from the most vulnerable of our citizens, especially when that money is scarce to begin with.

The latest in a series of fraud-based businesses to take advantage of the lax oversight over Medicare dollars is a scheme involving HIV/AIDS clinics in south and mid-Florida.  These clinics have made so much money that officials are asking the public for help in stopping the fraud.

Officials have announced a new “Infusion Fraud” hotline, asking the public to call and report phony HIV/AIDS treatment in an effort to stop clinic operators from receiving millions for services and treatments not provided.   These unscrupulous clinic operators have been most prevalent in south Florida and purchase Medicare lists or pay patients to come into their offices, and then bill Medicare for millions of dollars in fraudulent claims for treatments never provided.  Last week a couple who ran a billing service was sentenced to 14 years in prison for billing nearly $150 million in fraudulent claims for 85 different clinics.

There are several ways that Medicare is trying to combat fraud in that area.  They have set up a hotline that people can call to report fraud if they become aware of it.  The fraud does not have to be HIV/AIDS related; it can involve any fraudulent issues or scams with Medicare. 

Medicare is also sending out Medicare statements to recipients in southern Florida on a monthly basis instead of quarterly in hopes that people will look at their statements and report any treatments or charges listed that were not received or don’t look legitimate.  By doing this monthly instead of quarterly, there is less of a time lag, giving Medicare a better chance of catching the perpetrators while they are still up and running and in business. 

Records show that last year HIV/AIDS claims for treatment totaled $1.5 billion in south Florida as compared to only $300 million in New York City.  This is an obvious imbalance that is receiving attention.

The phone number to report suspected Medicare fraud is 866-417-2078.

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