Zeroing in on Health Care Fraud’s Ground Zero: South Florida
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South Florida leads the nation in health care fraud, and the sheer scope of the problem — $60 billion is lost annually — should worry leaders, said a panel of frontline fraud fighters. They painted a troubling picture of the region, but said the answer to the problem is prevention, not prosecution.
“We’re known as the capital of health care fraud. It is embarrassing,” said Wifredo Ferrer, U.S. attorney for the Southern District of Florida, at a panel titled “Health Care Fraud’s Ground Zero: South Florida,” held during the University of Miami Global Business Forum, Jan. 12–14, 2011.
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Panelists (L-R) Brian Keeley, President and CEO,
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“People are migrating and moving, exporting their fraud knowledge and their schemes,” Ferrer explained. “It’s a shell game.” His office began focusing on health care fraud in 2005, looking at billing anomalies. Since then, 1,000 people responsible for $3 billion in fraud have been prosecuted. “And we’re not hitting everybody. We only have so many agents and so many prosecutors,” he said. “Prosecutors are not the answer. We can prosecute this over and over and double the numbers, and it’s not going to end.” Prevention, he concluded, is the key.
Ferrer was careful to assure the audience, many of whom were health care providers, that prosecutors weren’t second-guessing medical judgment. “Our job in these cases is not to second-guess medical judgment,” he said. “This fraud is so blatant.”
Cecilia Franco, Miami field office director of the Centers for Medicare and Medicaid Fraud, gave the audience an idea of the difficulty investigators have dealing with the problem. Every business day, Medicare pays 4.4 million claims totaling $1.1 billion to 1.5 million providers. Approximately 19,000 new providers apply to the program every month. And Medicare and Medicaid are required by law to process claims within a 15-day window. So they end up doing what’s called “pay and chase”: paying providers and later investigating any anomalies.
“All this money went out to the providers because we had such a small window,” Franco said. “Most of the time, we don’t get it back [when fraud is found].”
Like Ferrer, she said investigators have found that fraudsters evolve as fast as their schemes can be unraveled. “When they get caught in home health, they close and they go into DME [durable medical equipment]. When they get caught in DME, they close and go into infusions,” Franco said.
Investigators also struggle tracking down the real owners of health care companies because fraudulent operators use straw men to set up new companies all the time. “When you go there, somebody is sitting in front of a computer and you ask them what they do,” she said. “They don’t know what they do.”
Franco said she is also seeing a lot of identity theft in South Florida. She displayed a stunning national map of compromised Medicare beneficiary identification numbers. South Florida was completely covered, with only the Everglades showing. Her conclusion: A moratorium on the approval of new providers is the only thing that will enable investigators to get a handle on fraud in the region.
Providers do need more scrutiny, agreed John Gillies, Special Agent in Charge of the Miami Division of the FBI. “It’s got to be more difficult to apply to be issued a provider number,” he said. He called on Congress and the Centers for Medicare and Medicaid to make changes, noting that the nation loses an estimated $164 million a day to health care fraud. And while the problem is most dramatic in Medicare, Medicaid is not immune. “Miami-Dade accounts for 90 percent of Medicaid claims in the state but has only 20 percent of the recipients,” Gillies said.
Gillies expects new requirements to use electronic medical records will cause a spike in identity theft because the reforms aren’t coupled with security measures. “We expect, with the rush to get these records up and the security following, we’re going to see fraud go up,” he said.
Other challenges include the medical expertise required to investigate many of these frauds, and Gillies noted that UM experts have helped his agents understand the frauds they were finding. “Some of the agents … were working bank robberies before and now they’re expected to be experts in infusion therapy,” he said.
Medicare fraud is a problem unlikely to go away anytime soon. Ferrer urged people to talk to their older relatives and friends and help them look out for criminals who may be using their Medicare numbers to engage in fraud. “Look at those Medicare explanations when they come in the mail. I tell my mom that all the time,” he said.
