Feds clamp down on Medicare abuse

The schemes for ripping off Medicare range from audacious to shameless.

Physicians and home health agencies in the Chicago area have submitted reimbursement claims for patients who were dead at the time a service was allegedly provided. Some claimed to be working more than 24 hours in a single day. Others go for run-of-the-mill grifting, billing for pricey power wheelchairs while giving patients less expensive scooters.

These tales come from criminal cases filed by the U.S. attorney's office for the Northern District of Illinois. Federal officials have launched an aggressive attack on fraud and abuse in Medicare, the federal health insurance program for the elderly, and Chicago last year became one of nine cities to receive money to support a law enforcement group dedicated to trolling through data to find irregular billing patterns and track down leads.

That effort has led to an uptick in local cases, from at least a few per year from 2007 to 2010, to about 20 cases since 2011.

Federal health care reform also has armed law enforcement with more tools, such as stiffer prison time for crimes that involve more than $1 million in losses and enhanced screening requirements for Medicare providers and suppliers.

With the increased enforcement, experts say local providers have been beefing up audits and hiring consultants to sift through the complicated Medicare regulations to ensure they don't become a target.

“You see a lot of providers spending significant amounts of money to make sure they don't get into problems,” says Kevin Ryan, a partner at Chicago-based Epstein Becker & Green P.C. who focuses on health care law. “I think clients were concerned about fraud in the past. I'm just not sure they were necessarily as proactive.”

Net widens

In 2007, the U.S. Department of Justice and the U.S. Department of Health and Human Services launched the Medicare Fraud Strike Force in Miami to root out fraud and abuse among durable medical equipment suppliers and infusion therapy providers. Since then, strike force teams have expanded to other cities, with Chicago and Dallas the latest additions.

Chicago received $3 million in strike force funding in 2011, 6 percent of the $47.8 million allocated to strike force cities. Funding for the 2012 fiscal year remains the same, a U.S. attorney's office spokesman says.

A Justice Department spokesman declines to answer questions about the strike force in Chicago. A spokesman for the HHS inspector general's office referred questions to the Justice Department.

But it's clear the overall enforcement effort has paid for itself many times over. Since 2009, officials have recouped about $11 billion, U.S. Attorney General Eric Holder said in an October press conference. For every dollar spent on combating health care fraud, federal officials have returned more than $7 to the U.S. Treasury, Mr. Holder said.

In the Northern District office, Medicare cases have involved physicians and home health agency owners who allegedly paid kickbacks for patient referrals and submitted false reimbursement claims, some allegedly bilking Medicare of millions of dollars.Among the recent allegations:

• Sharon Rinaldi, an Inverness psychologist, was charged in October with submitting thousands of false claims for providing services to beneficiaries in skilled nursing homes, some of whom were dead, and she allegedly inflated the number of hours of services provided, often exceeding 24 hours in a day.

An attorney for Dr. Kolbusz says his client did nothing wrong, while attorneys in the other cases didn't return calls for comment.

“Once we tackle something and we make our mark on that, then the tactics switch,” she says.

Large and small health care providers recognize that allegations of fraud can damage their bank accounts and their reputations, and they have stepped up their internal reviews.

“We are such a small place. For us to have that happen here, we just can't afford it,” CEO Jesus Ong says.


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