'Rags to riches' through Medicare fraud

[Guest guest]

'Rags to riches' through Medicare fraud

http://www.msnbc.msn.com/id/25133095/page/2/

By

All it took to bilk the federal government out of $105 million was a

laptop computer.

From her Mediterranean-style townhouse, a high school dropout named

Rita Campos orchestrated what prosecutors call the largest

health-care fraud by one person. Over nearly four years, she

electronically submitted more than 140,000 Medicare claims for

unnecessary equipment and services. She used the proceeds to finance

big-ticket purchases, including two condominiums and a Mercedes-Benz.

Health-care experts say the simplicity of Campos 's scheme

underscores the scope of the growing fraud problem and the need to

devote more resources to theft prevention. Law enforcement

authorities estimate that health-care fraud costs taxpayers more than

$60 billion each year.

A critical aspect of the problem is that Medicare, the health program

for the elderly and the disabled, automatically pays the vast

majority of the bills it receives from companies that possess

federally issued supplier numbers. Computer and audit systems now in

place to detect problems generally focus on overbilling and

unorthodox medical treatment rather than fraud, scholars say.

" You should be able to spot emerging problems quickly and address

them before they do much harm, " said Malcolm Sparrow, a Harvard

professor and author of " License to Steal, " a book about health-care

fraud that advocates for greater federal vigilance. " It's a miserable

pattern, a cycle of neglect followed by a painful and dramatic

intervention. "

'Highly vulnerable' to fraud

Fallout from the Campos case continues. After pleading guilty

to filing false claims, she has helped authorities win indictments

against more than half a dozen doctors and patients who allegedly

accepted kickbacks for pretending to receive costly HIV drug therapy.

With cooperation from Campos , FBI agents this week arrested

three Miami-area men who, the government alleges, financed sham

clinics that billed the government more than $100 million.

R. Levinson, the inspector general of the Department of Health

and Human Services, has warned repeatedly that the Medicare program

is " highly vulnerable " to fraud, particularly in South Florida, where

schemes center on expensive, infusion-based HIV medications and on

equipment such as wheelchairs, walkers, canes and hospital beds.

Officials from the Centers for Medicare and Medicaid Services (CMS),

which oversees federally funded health programs, say they have

stepped up their efforts to combat fraud over the past year by

working closely with investigators, removing the requisite billing

numbers of nearly 900 companies and imposing new standards in high-

fraud areas that would prevent people convicted of felonies from ever

receiving a Medicare number.

Troubling patterns

" There's always more fraud than we have resources to combat, " said

L. Brandt, director of program integrity at CMS. " We have

done a much better job of realigning our resources to attack this

problem. "

Investigators and prosecutors trained their focus on Miami after

noticing two troubling patterns:

HHS investigators discovered that nearly half of 1,581 medical

equipment companies they visited in the Miami area did not comply

with basic Medicare requirements to be open during scheduled hours

and to have a telephone number. The inspector general and the

Government Accountability Office have flagged weak oversight of these

kinds of suppliers for a dozen years, according to congressional

testimony.

The South Florida region bills Medicare more than $2 billion each

year for injectable HIV medications. That figure is 22 times as high

as the amount of similar claims in the rest of the country, and is

far out of line with demographic data in a population of 2 million

people in Miami-Dade County, HHS statistics show.

Justice Department officials moved to freeze money in suspicious bank

accounts controlled by medical equipment company owners and they

created a Washington-based strike force to handle the issue. The

strike force, in concert with a small group of U.S. attorney's

offices, has in the past year opened nearly 900 criminal

investigations and convicted 560 defendants in health-care fraud

offenses throughout the country.

'Operation Whack-a-Mole'

Authorities say the strategy is working. They point to a $1.75

billion drop in Medicare claims in Miami since the operation began a

year ago. But even government officials hope for a more comprehensive

solution.

Dennis, the special agent in charge of the HHS inspector

general's office in Miami, said fraudulent medical equipment

companies appear to have shifted gears since the strike force

arrived. After a crackdown in South Florida, at least some corporate

owners moved to the north, he said. Investigators dubbed one

initiative " Operation Whack-a-Mole, " after the carnival game in which

a creature pops up in different places after being hit with a hammer.

" The sheer number of zeroes following the dollar sign is irresistible

to crooks and con men, " Attorney General B. Mukasey said last

month during a Miami visit. " For every crooked company we bust, there

is another one to replace it before the ink on the indictment is

dry. . . . The money and the temptation are simply too big. "

The strike force recently established a base in Los Angeles, another

area rife with fraud. Prosecutors announced criminal charges last

month against two medical equipment company owners who are accused of

falsely billing Medicare more than $2 million. Plans call for a

similar rollout this fall in Houston, another potential fraud hot

spot.

'Rags to riches'

" You can see how these frauds spread through communities, " said Kirk

Ogrosky, who is deputy chief in the Justice Department's fraud

section and helps lead the strike force. " Family members and friends

just get sucked into it. It's really rags to riches on the backs of

the American taxpayer. "

Officials who oversee the Medicare program say they are vigilant

despite time pressure and limited resources. Employees review fewer

than 5 percent of the nearly 1 billion claims filed each year. The

vast majority of claims shuttle through computer systems that are

tweaked when authorities notice fraud patterns. This year, CMS is

working to finalize a rule that would prevent convicted felons from

obtaining Medicare billing numbers. At present, that regulation

applies only in a few high-fraud regions.

" It's a big volume, " Brandt said. " No matter how hard we try to get

people trained, there's always going to be a margin of error. "

10-year sentence

Sentenced to 10 years, Campos , 60, may yet reduce her prison

term by helping authorities unwind " the large web of medical clinics,

doctors, nurses, money laundering companies and HIV clinic financiers

who participated in this massive fraud, " prosecutors wrote earlier

this year in court papers. Her lawyer did not return calls seeking

comment.

By many accounts, Campos was unusually successful.

Prosecutors say that corrupt medical clinic owners anticipate that

Medicare will cover a quarter of their phony claims. But Campos

persuaded authorities to cover 60 percent of all the bills

she submitted on behalf of 75 HIV clinics in South Florida, according

to court filings.

As the owner of R and I Medical Billing, Campos advised

clinic owners how to justify the costly HIV treatments and

manipulated Medicare claims to make sham clinics appear to be

legitimate health-care facilities, prosecutors said. She personally

collected more than $5 million with which she bought property and

luxury items. Over the past year, however, Campos has met

repeatedly with law enforcement agents to unravel the scheme, which

ran from 2002 to 2006.

At the time of her sentencing in March, Campos had amassed a

net worth of $1.5 million, including one of the condominiums where

her son, an employee of her billing company, had lived.