"Now we're seeing people who aren't doctors open these clinics and hire other dirty real doctors to 'work' in the clinic," says the Detroit agent. "Almost every day, there's a new thing."

Like many states, Minnesota pays HMOs to administer its Medicaid programs. But David Feinwachs, an attorney for the Minnesota Health Association, a trade group for the state's hospitals, noticed something odd. While actual providers had seen their reimbursement rates frozen for more than a decade, HMOs were hiking their management fees 10 percent a year just for playing middleman.

So Feinwachs started examining the HMOs' finances. "Because they're nonprofits, nobody ever looks at them," he says. "It's the perfect cover, because everybody goes, 'They're nonprofits. What's the problem?'"

Gov. Rick Scott was CEO of a hospital company nailed with two sets of books. Then he went into politics.
Gage Skidmore
Gov. Rick Scott was CEO of a hospital company nailed with two sets of books. Then he went into politics.
Christopher Dennis and Reginald France work out of the Miami-area HEAT task force office.
Liliana Mora
Christopher Dennis and Reginald France work out of the Miami-area HEAT task force office.

He soon found they'd turned Medicaid into a cash cow, making it several times more profitable than their private insurance. But when Feinwachs asked for more data on their costs, the state blocked him, claiming it was proprietary information.

He was outraged. "You can't take tax-funded programs, turn them over to vendors, and claim that what happened to the money is a trade secret."

He also found evidence that HMOs were overbilling Medicare to cover for cuts in its state Medicaid program, thus making every taxpayer in America chip in for Minnesota's duplicity. Two months later, Feinwachs was fired for insubordination.

Though Congress eventually began investigating his claims and multiple investigations continue, Feinwachs remains unemployed. He now spends his time agitating for reform.

"The interesting thing about health-care fraud is that our government always goes after low-hanging fruit," he says. "If they were storekeepers, we'd put in surveillance systems and armed guards to catch kids stealing gum from around the cash register. Meanwhile, we have people backed up to our warehouses with semitrailers loading the merchandise, and we're oblivious to that."

Some of the Medicare fraud is so ridiculous, it's hard to believe. Take Armen Kazarian, kingpin of Los Angeles' Armenian Mob. The feds say his gang stole the identities of doctors and patients while setting up fake clinics across the country. They knew nothing of medicine, sending Medicare fake bills that showed eye doctors doing bladder tests, obstetricians testing for skin allergies, and dermatologists billing for heart exams. Medicare paid out $163 million before Kazarian and 73 henchmen were caught by the FBI. In February, Kazarian received a sentence of just three years.

Not all schemes are this flamboyant. Some simply employ sleights of paperwork. A Detroit podiatrist billed Medicare $700,000 for performing toenail removals that amounted to little more than toenail clipping. Two Miami doctors billed back rubs as physical therapy, taking in $57 million. In 2009, private ambulance services in Harris County, Texas, billed Medicare $62 million for emergency shuttles. By comparison, New York City received $7 million for the same services.

Some scams are so brazen that they advertise on TV. Remember those late-night Scooter Store ads, promising to get you a motorized wheelchair "at little or no cost to you"?

In 2007, the San Antonio company agreed to pay $4 million in civil fines and forfeit another $43 million for advertising one scooter but delivering a more expensive model on Medicare's dime.

Executives didn't learn their lesson. The Scooter Store was soon caught again, this time for overcharging Medicare by as much as $87.7 million between 2009 and 2011, according to an audit. But the federal Centers for Medicaid & Medicare Services (CMS) agreed to a spectacularly lenient settlement, allowing the company to repay just a quarter of that figure.

The feds would get tough only after CBS aired an investigation illustrating how the company browbeat doctors into writing unnecessary prescriptions for scooters. They raided Scooter Store headquarters in February. It finally appears the company has been barred from federal health programs.


The sad thing about Medicare fraud is that it ends up hurting the people it was initially meant to protect — society's weakest. It also taints the people standing up for them.

Because it treated Texas' poorest citizens — its mentally ill, its drug-addled — Houston Riverside General Hospital, a 95-year-old nonprofit formerly known as Houston Negro Hospital, was at one point losing $10,000 a day. That's when executives decided to cauterize the wound with a hot poker of fraud.

In 1996, the State of Texas accused Riverside of padding fees and billing for drug rehabilitation services it never provided. Texas canceled $1 million in contracts and demanded that the hospital repay $763,000 more. It also urged the feds to audit Riverside's Medicare and Medicaid payments.

Yet charges of fraud weren't enough for bureaucrats to fully close the spigot. The money continued to flow. It would take another eight years before the state had finally had enough. In 2004, it moved most of its drug-treatment contracts to more trusted providers, slashing Riverside's funding by 75 percent.

Congresswoman Sheila Jackson Lee tried to look like a hero as she cried to restore the money for the poor. Gov. Rick Perry obliged with another $3 million.

It wasn't until 2011 — 15 years after the initial accusations — that law enforcement got serious, prompting an administrator, Mohammad Khan, to confess to enriching the hospital through a kickback scheme. He'd been paying "recruiters" $300 a head to bring Medicare patients to Riverside's six psychiatric clinics. They arrived by the van-load for daily therapy sessions they rarely qualified for or received. Medicare picked up the $116 million tab. Only when this scheme was discovered did the CMS finally halt the hospital's payments.

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My Voice Nation Help
17 comments
adela_juliana
adela_juliana

For prescription drugs we go to the Cuban doctors

for coke pot  crack and bath salt  we go to the hood

for meth we go to our local white trash  trailer parks

limpindrummer
limpindrummer

It's ironic that the same republican cubans, who make their living stealing from Medicare, vote for incompetent, corrupt, republican, politicians (cuban or not), who seek to abolish Medicare.  I'll go out on a limb and guess that they're still in business because they're greasing the republican cuban law enforcement personnel who are supposed to be investigating them.  Okay, not that much of a limb!

But, none of that is as ironic or as funny as their dim witted, republican, teabagger, counterparts who show up at teabagger rallies with signs that declaim: "KEEP GOVERNMENT OUT OF MY MEDICARE." 

moalta
moalta

Wow... you American especially in Florida amaze we Canadians.  Glad to see your problems with Cuban ripoff artists ... it's the least you deserve in payment for your stupid policies about Cuba.  We Canadians, and the rest of the world, actually recognize Cuba's independence and treat Cuban immigrants equally with other countries, thus avoiding acceptance of scumbags which you seem to welcome in Florida.  More importantly, we and all of western Europe have publicly administered and funded healthcare (hospital, doctor and lab services) and avoid the "for profit" high costs and ripoffs you Americans withstand.  By keeping these services private in the US, you deserve the inevitable high costs and ripoffs that will occur.  Ain't American values (capitalism and guns at any cost!) great!  Sorry to be arrogant but the US seems overly populated with right-wing yahoos and their blind followers.

goces1
goces1

Even Fidel Castro is in on this....Several Cuban nationals have come here to rake millions to Cuba's banks for the dictators.

stephenwnwrght84
stephenwnwrght84

These Jackasses make Florida look bad. And make it worse for the really sick & Disabled people living in Florida Hell Even Governor Rick Scott Got fined for this.before he was Elected governor. We need a new Governor. I miss Charlie Crist & im a Democrat

internetinternet
internetinternet

Flood insurance, mortgages, condominiums, and auto insurance.  Revolving door of fraud.  Welcome. 

run.randrand
run.randrand

SO BAND TOGETHER A MOB FIGHTING CREW LIKE ELLIOT NESS'S "UNTOUCHABLES", BACK IN THE PROHIBITION DAYS...!!!!!

Palangana
Palangana topcommenter

"South Florida Is Ground Zero for Medicare Fraud"


You don't say.

drakemallard
drakemallard topcommenter


cuban medicare fraud and marco rubio is silent about

 South Florida is known as the capital of Medicare fraud,

Feds in Miami: Millions stolen from Medicare wound up in Cuban banking system In an unprecedented case, federal prosecutors have charged a Miami man with engaging in a massive money laundering scheme that moved millions stolen from the federal Medicare program into Cuban banks.

limpindrummer
limpindrummer

You sound like you've been paying too much attention to reality.  Don't you understand that real Americans watch Fox News and parrot corporate fascist talking points as if they were actually true? 

Exiliado
Exiliado

@moalta I would argue with you, especially about why and how it is immoral to recognize the dictatorship currently oppressing Cuba, but when you call those with a different opinion "stupid", "right-wing yahoo" or "blind", you simply disqualify yourself. You, or your opinions, cannot be taken seriously due to your admitted arrogance and your lack of respect or tolerance for differing opinions.

305carolann
305carolann

@moalta Very easy for you to say... how many Cubans do you have living in YOUR neighborhood.  Any Botincas around?  Maybe some severed goat heads.  Don't get me started on Canada... how about you go bash some harp seals skulls in?  Or better yet, look up your local sexual predator - oh, that's right YOU CAN'T because that isn't public info there.  Your medicine is not nearly as good as ours here in America - that is a fact, look up the statistics.  Do you know how many freaking Quebec license plates I see daily? If the USA is soooooo bad why the fuck are there thousands of Canadians on MY beach with fat guts hanging over their speedos? 

adela_juliana
adela_juliana

@drakemallard 

Cuban banks?

FYI Cubans here and abroud put our money in the Netherlands like Mitt  Romney, Cuba does business with all the countries in the world ---not the USA====

run.randrand
run.randrand

@drakemallard .....ehhh? They do more then take days off, lie as politicians, eat black beans and slog down sweet, strong coffee in little cups??! Whoddathunkit???!

limpindrummer
limpindrummer

You are employing a strawman.  Moalta did not call "those with a different opinion," stupid, blind, etc.  It is quite clear from her/his post that he/she is referring to those with a very specific opinion: who support capitalist medicine, not the open ended false premise: "those with a different opinion," that you have tried to divert the argument with. 

moalta
moalta

@305carolann @moalta We Canadians go to Florida, Mexico and CUBA (700,000 to Cuba last year!) because it is warm.  More Americans by far die from lack of proper medical care than do Canadians because our doctor and hospital services are available for everyone without direct charges. It is also more efficient ... the cost of administering your private services and private insurance companies is the highest in the world.  It is foolish and stupid and the rest of the world knows it.  Enjoy your blissful ignorance.

 
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