In 1998, Aghaegbuna “Ike” Odelugo came to the U.S. from Nigeria to earn a master's degree. But those plans changed when he engaged in a business he said presents unique opportunities for fraud and abuse: the U.S. durable medical equipment industry.
Hearings tackle Medicare abuse
Committing durable medical equipment fraud is 'incredibly easy': witness
Odelugo, who defrauded the Medicare program of about $9 million, was among witnesses testifying last week in a series of congressional hearings on healthcare fraud and abuse. Appearing before the House Ways and Means Oversight Subcommittee, Odelugo said that beginning in 2005 and until 2008, he participated in schemes with others in 14 different companies across 11 states.
“DME fraud is incredibly easy to commit,” Odelugo said. “The primary skill required to do it successfully is knowledge of basic data entry on a computer.”
He also speculated on how and why the fraud occurs. “This is a nonviolent crime and is often committed by very educated people, including businesspeople, hospitals, doctors and administrators. It reaches across all ethnic and racial lines.” He added that healthcare fraud often preys on what he called an unsuspecting victim base of Medicare recipients: elderly citizens looking for care and attention.
Odelugo's mention of Medicare fraud as a nonviolent crime came up at another House hearing. Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and Commerce Oversight and Investigations Subcommittee said news reports have indicated Medicare fraud is quickly surpassing the drug trade as Florida's most profitable—and efficient—criminal enterprise, especially because the penalties are lower and the threat of violence is nonexistent.
Equally upsetting to Stearns is that only estimates, not hard figures, are available to reflect how much the Medicare and Medicaid programs lose each year to fraud. He cited a “60 Minutes” report last fall that suggested the number was $60 billion. In the Ways and Means Oversight Subcommittee hearing, Lewis Morris, chief counsel to the HHS inspector general, said he estimated healthcare fraud ranges from $60 billion to $100 billion for both the public and private sector. Kathleen King, director of the Government Accountability Office's healthcare division, said CMS estimates that in fiscal 2010, improper payments for Medicare fee-for-service and Medicare Advantage totaled $48 billion.
“We're glad to implement any anti-fraud measures,” Stearns told the first panel of witnesses at the Energy and Commerce subcommittee hearing, which included John Spiegel, director of the Medicare program integrity group at CMS' Center for Program Integrity; Gerald Roy, deputy inspector general for investigations in HHS' office of the inspector general; Omar Perez, assistant special agent in the inspector general's office; and King.
“My concern is before we expand Medicare and Medicaid, we still don't know how much we've lost to fraud,” Stearns continued. “It seems to me, if you don't have a handle on what that amount is, it's going to be difficult to penetrate it down.”
Congressional leaders probed witnesses about what the public and private sectors are doing to combat fraud—and how the two sectors can work together in this effort. The Senate Finance Committee requested that both HHS and the Justice Department submit quarterly reports that include results of the departments' anti-fraud initiatives. And Roy testified about recent success in one of those initiatives—the Medicare Fraud Strike Force, which is a component of the administration's Health Care Fraud Prevention and Enforcement Action Team. As of Feb. 28, Roy testified, the inspector general's strike force efforts across the country have charged more than 800 defendants, of which 390 have been convicted and sentenced, resulting in more than $376 million in court-ordered restitutions, fines and penalties. Together, the inspector general and Justice Department launched the first strike force efforts in 2007 in South Florida, and the model was later expanded to another eight cities, most recently Chicago and Dallas.
Last year's Patient Protection and Affordable Care Act provides an additional $350 million over 10 years, plus an inflation adjustment, to boost efforts in HHS' fraud and abuse control program in Medicare and Medicaid, according to testimony from Spiegel. In addition, President Barack Obama's fiscal 2012 budget proposal requested a little more than $1.85 billion for this account, which would be divided among CMS' programs, the inspector general's office and the Justice Department.
In her testimony to the Ways and Means Oversight Subcommittee, Karen Ignagni, president and CEO of America's Health Insurance Plans, offered additional measures to prevent and detect fraud, such as recognizing the role of fraud prevention and credentialing activities in quality improvement; and providing stronger protections for private health plans that supply information on suspected fraud to any public or private entity.
—With Rich Daly
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