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In a more fundamental sense, law enforcement officials are revising their approach to health-care fraud. Previously, cases were made by reconstructing criminal conduct through documents, a process that took years. "Those days are over," vows one FBI agent. "From now on, we're going to be working proactive cases." In other words, going undercover. Planting wiretaps. Opening fake clinics. Catching crooks in the act.
Accordingly, local fraudbusters are finally receiving the help they've clamored for. The FBI's Miami fraud squad has grown from eight investigators to twenty this year. The Dade contingent of the Medicaid Fraud Unit will have up to 39 investigators by July, more than half the staffing for the entire state. And most dramatically, local Health and Human Services investigators now number a half-dozen, up from an all-time low of one agent last year.
Representatives from these units are also meeting with Medicare/Medicaid officials on a regular basis to develop a unified strategy. "We're trying to treat medical fraud like any other organized crime syndicate," notes one HHS agent. "That means going after the kingpins -- the doctors and the owners of these fraudulent provider companies."
State and federal sources say at least four major cases are under investigation by the grand jury, each of which involves losses to the Medicare/Medicaid systems of five million dollars or more.
Law enforcement officials are also pushing for tougher state and federal sentencing guidelines. Historically, fraud has been considered a lesser offense because it is a nonviolent and so-called victimless crime. "They may not have been stealing with a gun, but they're stealing a lot more," argues Mark Schlein, director of Florida's Medicaid fraud unit. "And the people who suffer in the end are the sick and the elderly."
In his March address to Congress, FBI director Louis Freeh called for a revision of existing racketeering and money-laundering statutes so federal prosecutors can more easily build cases against medical fraud suspects.
For all the noble intent, there have been a few glitches in the new approach. The most striking example -- one that would be funny if it weren't so pathetic -- was an FBI operation to catch thieves by selling copies of 35 actual Medicare cards to a suspected Medicare mill. Essentially, a Medicare card is like a credit card that allows a health-care provider to bill the government in a patient's name. Because the cards are based on Social Security numbers, Medicare cannot cancel the cards.
The FBI sold the cards, hoping to get some good leads. But they never bothered to inform their rightful owners or Medicare officials. The result: Scammers billed and received tens of thousands of dollars for medical care never provided.
Furious Medicare officials point out that the FBI easily could have requested that phony cards be issued for the probe.
The FBI's defense? They bought the cards on the street, so they would have fallen into the wrong hands anyhow.
THE BOTTOM LINE
As lame an excuse as that might be (and it sounds plenty lame), it does highlight the root disease of the Medicare/Medicaid system.
Simply put: The government gives away its money too freely.
"It's this never-ending game of pay and chase," complains one fraud prosecutor. "We can add agents until the cows come home, but the only way to stop fraud is to set up a meaningful screening process on the front end."
Officials at the Health Care Financing Administration (HCFA), the federal agency that runs Medicare and Medicaid, say they are acutely aware of the problem.
"We know we have to start putting some controls in, and that's precisely what's happening," says Linda Ruiz, director of HCFA's Office of Medicare Benefits Administration. She points to efforts such as the National Supplier Clearinghouse, a survey set up to more closely monitor which suppliers are allowed to bill Medicare. As a result of this added supervision, HCFA has disqualified about 1500 suppliers. Administrators also hope to introduce a new computer system designed to detect patterns of fraudulent billing. Ruiz says HCFA was so concerned about the situation in Dade that the agency set up the South Florida Workgroup, a collection of local and national Medicare and Medicaid experts who spent a year studying ways to stanch fraud.
But she warns that the Med systems are simply too huge to be retooled overnight. Last year, for example, Medicare disbursed $158 billion to 1.6 million providers on behalf of 36 million patients. Medicaid will provide $7.2 billion worth of care this year to 1.5 million indigent Floridians.
Critics of HCFA say reform has been glacial at best. "If you really want to stop fraud, the first thing to do is blow up HCFA and start all over again," says one exasperated federal official. "They run all over the country saying all the wonderful things they're going to do. But they're still trapped in this leftover mentality that 'we have to be nice to the providers or they won't take the Meds.' They act as if being a provider is every American's right. They need to realize that more than ten percent of these providers are criminals. And they've raped South Florida."