Federal agents Wednesday executed search warrants on about 50 supposed medical-equipment providers in South Florida in one of the largest-ever investigations of billing for durable medical equipment, involving up to $250 million in false claims, Modern Healthcare has learned. The investigation began when the FBI identified 104 companies that had billed Medicare for $144 million in durable medical equipment between January 2003 and June 2004. Of those, 49 companies received $122 million -- $103 million of it within a three-month period, according to a probable-cause affidavit filed Tuesday in U.S. District Court, Miami, by FBI Special Agent Ashley Taylor. The bills primarily covered wound-care products and special mattresses for patients with bed sores.
The affidavit identified as possible defendants 58 companies, two individuals -- Abner and Mabel Diaz -- and a billing company controlled by the Diazes, All-Med Billing. No charges have been filed. At deadline, neither of the Diazes nor All-Med could be reached. The phone number for Abner Diaz was unlisted, while the telephone at All-Med was off the hook, according to the operator. U.S. Attorney Marcus Jimenez in Miami and HHS' Acting Principal Deputy Inspector General Dara Corrigan declined to comment on the investigation, saying many documents remained under seal.
The government affidavit alleged that most of the companies were storefront operations that did not stock medical equipment and often did not maintain business hours. According to the affidavit, investigators interviewed more than 130 doctors and Medicare beneficiaries, who complained of forged prescriptions for equipment and of not receiving services and equipment for which they were billed. Most of the companies underwent recent management changes but did not inform Medicare contractors; almost all hired All-Med within the past six months, the affidavit said. According to sources, the raids involved agents from the FBI, Internal Revenue Service, HHS' inspector general's office and the U.S. attorney's office in Miami. -- by Mark Taylor