Carnival of Fraud

Step right up and be astounded by Miami's bizarre side show of Medicare and Medicaid scammers! After all, you're paying for it!

Recruiters find professional bennies and transport them to clinics for testing. On some streets -- Flagler, for instance -- the glut of recruiter vans and buses has spurred complaints from neighborhood residents. Not to worry: According to the FBI, certain clinics have hired off-duty police officers for crowd control.

The entire Medicare/Medicaid system is driven by physicians. Without their certification that a test or procedure is "medically necessary," the government won't pay. Doctors who receive kickbacks for their signatures are known as doctors of signology. One state investigator is fond of recalling his visit with one suspected doctor of signology. The man, who is ostensibly examining patients for twenty different clinics around town, was so infirm he could barely totter from his living room to his bathroom.

Weary of the rigors of government paperwork, doctors are increasingly turning to professional billing services, which some investigators have dubbed bilking services.

The jargon is fascinating, but fast becoming dated. South Florida's most recent big-ticket scam, in fact, required no professional bennies or recruiters or doctors of signology. No people at all. Just a few industrious nerds sitting at home with personal computers and modems.

According to an indictment filed last month, nine Dade Countians were able to take Medicaid for more than a half-million dollars by filing electronic claims for treatments at phantom clinics, using the names of eligible patients and doctors. The ring is said to consist of four sisters and their friends joy riding the Medicaid system.

The case may be a harbinger. Prosecutors say that as more and more billing is done via computer, they fear the system will become vulnerable to a new breed of charlatan -- computer hackers who can tap into the system and wreak havoc, leaving not a trace of paper behind.

It is comforting to know that as technology advances, South Florida's scammers keep pace.

At this point, you may be shaking your head and muttering about how easy it is to defraud Medicare and Medicaid.

Conversely, you may be wondering how to grab your slice of the pie.
Without getting too specific -- New Times wouldn't want to be held responsible for fostering criminal behavior -- we offer the following primer.

Step 1: Using a fictitious name, file papers of incorporation with the state for your new medical-service company.

Step 2: Rent a mailbox and buy a beeper.
Step 3: Apply to receive your Medicare (or Medicaid) provider number. The applications are just a few pages long and only ask for basic information. Name, address, and phone number. To avoid detection, it's best to list your fictitious name, the address of your rented mailbox, and your beeper number. Remember, verification is minimal, especially for medical suppliers and diagnostic clinics.

Step 4: Get your hands on some Medicare/Medicaid recipient numbers. These can be acquired through door-to-door recruiting, visiting nursing homes, or simply cozying up to the right hospital staffers.

Step 5: Find a physician who doesn't mind bending the rules a little by providing his signatures for necessary medical forms. It's best to look for an older doctor, preferably one who was trained outside the U.S. Remember: In a pinch, you can always forge a signature.

Step 6: File your claims!
Helpful hint: If you're planning to do big business, open a few companies. That way payments will stay small enough to escape the interest of those pesky auditors.

Federal Magistrate William C. Turnoff was incredulous. Before him stood a balding man with a ponytail. Pedro Luis Artola described himself as an unemployed tow-truck driver from Boston. He was being arraigned in federal court because prosecutors alleged he was the mastermind of a scheme that took Medicare for $300,000 by billing the system for diagnostic tests performed at a phantom medical lab. Some 70 of the patients purportedly tested were dead.

"Is no one checking?" Turnoff wondered aloud. By which he meant: "You mean this guy nearly got away with 300 grand? Why in God's name did I allow my parents to push me into law school?"

The case was actually a little less outrageous than it seemed to Turnoff last July. Yes, a fraud had been committed. And yes, supervision had been virtually nil. But Artola wasn't the mastermind. Though he had spent nine months in jail under this presumption, prosecutors eventually would admit that he was only a gofer who'd been paid a total of $200.

As embarrassing as the Artola affair was, it did lead to a major innovation in the fraud crackdown, one that may change the way prosecutors all across the U.S. pursue fraud criminals.

Artola was caught when he tried to withdraw $200,000 in cash from a bank account connected to a phony laboratory. In assessing the situation, federal prosecutors reached the not-so-startling conclusion that going after the money might be a dandy way to shut down this and other fraud operations. Rather than pursuing lengthy criminal probes, which allow perpetrators to spend or launder their profits, the feds are now filing civil suits to freeze ill-gotten assets within days of their discovery. They have collected about five million dollars so far using this technique, and helped stop payment on another three million dollars in apparently fraudulent Medicare payments. The Florida Attorney General's Office is taking a similar tack by suing Medicaid criminals for treble damages in civil court under the recently passed False Claims Act.

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