U.S. Targets Health-Care Fraud, Abuse
Thursday, July 19, 2007
Law enforcement authorities are stepping up an attack on health-care fraud that they say costs taxpayers more than $60 billion each year.
FBI officials yesterday reinforced their commitment to crack down on medical companies that send phony bills or provide excessive treatments, pointing to 2,400 investigations in 2006 and warning that a fresh spate of cases is on the way.
The new Justice Department Medicare Fraud Strike Force yesterday posted its third conviction this year after a trial in Miami. Prosecutors won a case against a Florida man whose pharmacies dispensed aerosol medications as well as other products that were not needed by patients as part of a long-running scheme to defraud the federal government.
The Department of Health and Human Services this month launched an initiative to track certain Medicare expenditures as they occur to stop the flow of money to sham businesses before criminals spend it. Medical equipment companies will be required to reapply and certify that their executives have not run afoul of the law in order to participate in the billing program -- one of several changes that could save more than $2 billion, HHS Secretary Mike Leavitt said at the time.
National health-care expenditures last year surpassed $2 trillion, according to government estimates, and they are likely to grow even larger as aging baby boomers require more medical treatments. That is spurring federal officials to renew their focus on health-care fraud.
"There are literally millions of ways to defraud the health-care system, and they devise new ones every day," said Joseph L. Ford, associate deputy FBI director.
The problem is found mostly in urban hotspots such as Los Angeles, Houston, and Miami, where a federal jury yesterday convicted Nelson Valdes of conspiracy to defraud the Medicare program in connection with drugs that were manufactured at two pharmacies he owned.
Valdes continued to provide unnecessary medicine to elderly and disabled patients even after he was arraigned on criminal charges a few months ago, according to District-based Assistant U.S. Attorney Kirk Ogrosky, who prosecuted the case. Valdes, who owns Florida Pharmacy and Discount and F&M Medical Rentals, faces up to 30 years in prison when he is sentenced later this year.
"Focusing our energy on combating the most prevalent Medicare fraud schemes will help protect patients from unnecessary medication and help protect the financial viability of the health-care program," Assistant Attorney General Alice S. Fisher said in a written statement.
Investigators say that policing the vast health-care system is daunting. Civil settlements with large corporations such as Tenet Healthcare returned more than $900 million to the government last year. But tracking smaller schemes that together bleed the system of hundreds of millions of dollars is also a challenge.
Salvador Hernandez, deputy assistant director in the FBI's criminal investigative division, cautioned that patients should carefully read the explanation of benefits they receive from hospitals or medical offices and check for items they never received.
He also warned consumers to protect their health insurance information, which can be stolen by criminals and used to bilk the system.
Sometimes, patients can be prompted to share their medical information in exchange for cash and gifts, authorities said.
For example, during Valdes's five-day trial in Miami, a Medicare recipient testified that Valdes paid him $150 a month for the use of his health-care data. The patient testified that on his behalf, Valdes charged the government health-care program for such items as incontinence supplies and a $500 penis pump. The patient said he never used any of the products.