AARP Bulletin - November 2009

; Your Health
U.S. attorney general, “represent health
care dollars” that could be spent on
medicine or care or hospital visits, “but
instead are wasted on greed.”
Yet Congress has denied Medicare the
money officials say it needs to truly po-
lice itself. Four years ago, as fraud began
spinning out of control, lawmakers ig-
nored Medicare’s request for $300 mil-
lion to fight these crimes—even though
the agency’s Office of Inspector General
says that every dollar spent protecting
the program returns $17.
Now, with Congress and the Obama
administration hoping to help finance
health care reform with $500 billion in
savings wrung from Medicare over the
next 10 years, cracking down on fraud
is a fresh priority. And it shows. Just
this year, anti-fraud efforts have seen a
marked increase in money and agents.
WASHINGTON
AFTER A ROUNDUP of 53 people in Detroit, Miami and
Denver involving a $56 million Medicare scam, U.S. Attorney
General Eric Holder, flanked by FBI Director Robert Mueller
and Health and Human Services Secretary Kathleen Sebelius,
vows to continue the fight on fraud in June.
for therapies—never administered—for
cancer, HIV and other illnesses. Investi-
gators 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 doc-
tors, 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 phan-
tom 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.
Miami vice
The nation’s first federal Medicare
fraud strike force hit the ground in Mi-
ami two years ago—with agents from
the FBI and investigators from the De-
partment of Health and Human Servic-
es’ Office of Inspector General, as well
as federal prosecutors. Altogether, the
strike force and the southern Florida
U.S. Attorney’s Office indicted 197 sus-
pects 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 “ar-
thritis 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

HOUSTON
FEDERAL AGENTS RAIDED businesses and homes
in Houston, New York, Boston and Louisiana and arrested 32
people in a recent $16 million Medicare fraud bust. Among
the alleged scams: giving patients $3,000 “arthritis kits” and
billing Medicare for liquid food for deceased people.

million, according the U.S. Department of Jus-
tice. 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 na-
tion. 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 alleg-
edly 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
Hardened criminals
Medicare is now a magnet for miscre-
ants, including not only dishonest doc-
tors and white-collar crooks, but hard
cases like Guillermo Denis Gonzalez,
a convicted murderer. He bought a
Medicare-licensed medical equipment
company and submitted more than
$500,000 in phony claims—two years
after walking out of prison.
He pleaded guilty to defrauding
Medicare in August but still faces mur-
der charges. Florida investigators say
that after an argument, he killed and
dismembered an acquaintance. The
victim’s body parts were found in six
black garbage bags in three different dumpsters
around the Miami area.
Calculating an exact national figure on the
costs of Medicare fraud—estimates of losses
range from $11 billion by the Centers for Medi-
care & Medicaid Services to $60 billion by in-
dustry experts—is difficult.
Criminals intent on stealing as much as they
can as fast as they can “have a relatively easy time
breaking through all the industry’s defenses,”
Malcolm Sparrow, a one-time fraud investigator
and now a professor at Harvard’s Kennedy School
of Government, told a Senate committee in May.