Strike Force Formed to Target Fraudulent Medicare Billing

Thirty-eight people have been arrested in the first phase of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program, announced Attorney General Alberto R. Gonzales and Secretary Michael Leavitt of the U.S. Department of Health and Human Services.

The arrests in the southern district of Florida are the result of the establishment of a multi-agency team of federal, state and local investigators designed specifically to combat Medicare fraud through the use of real-time analysis of Medicare billing data. Since the first phase of strike force operations began on March 1 in southern Florida, the strike force has obtained indictments of individuals and organizations that have collectively billed the Medicare program for $142,061,059. Charges brought against the defendants in these indictments include conspiracy to defraud the Medicare program, criminal false claims, and violations of the anti-kickback statutes. If convicted, many of the defendants face up to 20 years in prison on these charges.

The strike force is able to identify potential fraud cases for investigation and prosecution quickly through real-time analysis of billing data from Medicare Program Safeguard Contractors (PSCs) and claims data extracted from the Health Care Information System. In phase one operations in Miami, teams have identified two primary schemes that defrauded the Medicare program – infusion therapy and durable medical equipment (DME) suppliers. All of the strike force cases to date target these two areas.

The work of the strike force is just one step in a multi-phase enforcement and regulatory project designed to improve the quality of the industry and reduce the potential for fraud in the durable medical equipment and infusion areas. The Centers for Medicare & Medicaid Services is taking steps to increase accountability and decrease the presence of fraudulent providers. The end result will be better service to beneficiaries and savings of billions of dollars that might otherwise go to fraudulent businesses.

“This initiative targets those who steal taxpayer funds intended to provide health care to the elderly,” stated Gonzales in a press release. “Protecting the financial integrity of the Medicare program for generations to come is important to the millions of seniors who rely on this program. Through the collaborative efforts of federal, state and local law enforcement and other agencies, we will concentrate our efforts. The Medicare Fraud Strike Force will allow us to have real-time access to Medicare billing data and provide authority to move quickly to make arrests and bring prosecutions as quickly as possible. With better tools and information sharing, we can expect greater levels of enforcement.”

The indictments outline various types of fraudulent schemes. Those schemes included compounded aerosol medications – a process where a pharmacist makes medicine to meet a special medical need for a patient, rather than dispensing less expensive commercial pharmaceuticals. The indictments allege that the homemade medications were not necessary and that they were only prescribed to defraud Medicare.

Seizure warrants have been used to take money back from bank accounts associated with the activity alleged in the indictment. In one case, inspector general agents from the Department of Health and Human Services recovered more than $1.2 million from a corporate bank account after an arrest in Hialeah, Fla.

An indictment is merely an allegation and defendants are presumed innocent until and unless proven guilty.

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