Medicare fraudsters swindle millions from the feds

Hospitals, doctors, and drug dealers have made Medicare the nation's sweetest crime, but the feds are trying to shutter the door

It pans the surrounding strip mall, parking lots filled with license plates from Kentucky, Tennessee, and even Florida. That's how far people were willing to drive for a Las Vegas Cocktail.

The cocktail mixes Xanax, Soma, and Vicodin for a powerful opiate high. Monroe was its unofficial retailer. It was led by Oscar Linares, a doctor from the Dominican Republic who also worked at the University of Toledo Medical Center. Sometime in 2008, he started leading a double life.

The office went from seeing 40 patients a day to as many as 250. Over two years, Linares prescribed 5 million doses of narcotics. Traffic grew so heavy that he hired a parking lot attendant. Workers got bonuses when the patient count topped 200 in a day.

Texas U.S. Rep. Sheila Jackson Lee carried water for Medicare swindler Houston Riverside General Hospital
David Ortez
Texas U.S. Rep. Sheila Jackson Lee carried water for Medicare swindler Houston Riverside General Hospital
Florida Gov. Rick Scott was CEO of a hospital company that was nailed with two sets of books. Then he went into politics.
Gage Skidmore
Florida Gov. Rick Scott was CEO of a hospital company that was nailed with two sets of books. Then he went into politics.

The cost to Medicare: $5.7 million.

Linares rarely examined his patients. One undercover cop didn't see the doctor until his 10th visit, and then only via a television monitor. Linares's workers simply gathered patients' information and had them sign blank forms that would be filled in later. Then a guy who used to work at Lowe's would hand out the scrips.

When the clinic was raided in 2011, police seized $214,000 in cash, a yacht, and the 55-year-old doctor's fleet, which included a Ferrari Spider and a Bentley Continental.

Linares was charged with unlawful distribution of prescription drugs and Medicare fraud. He has pleaded not guilty and is awaiting trial.

Perhaps due to the doctor's nationwide reputation, his scam was short-lived. But a more durable fraud thrives a half-hour north, in Detroit's Cass Corridor. Amid this stretch of poverty and ruin emblematic of the city's decay lies a peculiar oasis agents call "The Beach."

It's situated near several shelters, which provide a steady flow of beneficiaries. Recruiters drink beer and sit on beach chairs — hence the name — wrangling people into vans that shuttle "patients" to doctors, home-health agencies, and mental-health clinics.

The doctors are the stars of this operation. They not only bill Medicare and Medicaid, but use the power of prescriptions as currency to pay accomplices. It's a multi-ring circus with the doctor at its center, kickbacks flowing in all directions to pharmacies, patients, and recruiters.

"A recruiter will identify a physician and work out a deal, saying, 'I'll bring you so many patients, and the recruiter will pay a physician $10,000 to $15,000 to write scrips like crazy, pad after pad for a week," says one Detroit HEAT agent.

"When you have a dirty doctor writing 500 scrips for Oxycontin a month, you have to have a pharmacy that is going to fill them. If a pharmacy sees a Dr. ABC's scrip 500 times a month, they will call and ask, 'What's up, doc?' The recruiter plays a role here, too, and says, 'I'm taking care of the pharmacy.'"

The scheme's even spawned sub-specialties, such as "quality assurance" experts. They're typically former doctors from overseas who read through patient charts to flag anything that might prevent Medicare from paying.

And since fraudsters realize that red flags rise when there's a billing spike from one company, they'll incorporate seven or eight to spread the grift. Some even launch check-cashing businesses to launder their money.

"Now we're seeing people who aren't doctors open these clinics and hire other dirty real doctors to 'work' in the clinic," says the Detroit agent. "Almost every day there's a new thing."


The Bureaucracy That Didn't Work (Until Just Recently)

Much of the ease with which the treasury is raided can be blamed on CMS, which bleeds like a hemophiliac, thanks to a strategy known as pay-and-chase. Since its inception, Medicare has operated with a "pay claims, ask questions later" ethos.

This might have been appropriate in the idealistic '60s, when the program was formed and doctors served as its virtuous gatekeepers. Fraud was such a secondary concern that it wasn't even officially made a crime until 1996.

But that carcass is so inviting today that prosecutors have adopted an unofficial threshold: People need to steal at least $500,000 before they're charged.

"All of these prosecutions are great," says Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association. "We have strike forces, but the prosecutions just tell you we have a big problem because that means the money's already out the door. So the focus now is starting to shift to prevention."

Enforcement started to pick up during the second term of President George W. Bush, then accelerated under President Obama, who expanded the task forces and made fraud-fighting a pillar of the Affordable Care Act, otherwise known as Obamacare. CMS was given greater discretion in suspending payments and screening providers before they entered the system. Penalties and prison time were also increased.

But excuse Congressman Michael Burgess's skepticism. The Tea Party Republican from Texas has heard such talk before.

The former gynecologist is willing to concede that progress has been made. Yet the sheer size of the task makes crime-fighting difficult. Every day, Medicare contractors process 4.5 million claims. Even Republicans admit that CMS is undermanned and forced to rely on contractors, whose ferreting of fraud is inconsistent at best.

"There was a famous case here in Dallas where a Nigerian woman had been busted," Burgess says. "As she was going off to jail, it was discovered that she had several other provider numbers. They discovered that she was receiving checks at the same post office box. It never occurred to anyone that, 'Hey anything that goes to P.O. Box 9058, that's a red flag.' We were probably paying for her defense."

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3 comments
bryanflake1984
bryanflake1984

This is a horrible story.  I need to help my mom find a great assisted living center to get into.  I am super skeptical and worried about any option we make going forward.  Can someone please put my mind at ease?


bryanflake1984|http://www.altaridge.com/

mohanlon3
mohanlon3

Looks like the folks getting medicare are not the ones getting the Free Ride,.

BeenThere
BeenThere

This is the kind of article that made the underground press famous for being a resource for The Truth. When Bachmann was still being taken seriously (among circus clowns and Republicans) as a candidate for President, her regular quoting of Grover Norquist (“I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub.”) spawned a likewise saying about corporations. You know you are living in a crazy place when criminals are exalted as “job creators” and law enforcement has to go underground to get convictions of these vicious monsters before our “representatives” go to work freeing them. We are that crazy place; the United States of America.

The simple solution for all forms of government fraud is to call it what it is, “treason,” and prosecute the perpetrators accordingly. If a few hundred of these Medicare fraud CEOs were executed by firing squad a lot would change quickly. Of course the best thing about executing CEOs is that they are easily replaced, so society would suffer no net loss from their absence.

Imagine a society where the smartest people were hard at work doing something useful. We are not that place, of course, but we could have been. Without the Reagan Revolution that celebrated criminal behavior and “screwing the government for fun and profit” (also known as cheating your neighbors and robbing your community) having made getting filthy rich with criminal behavior, the nation might have become a completely different place in 2013. Instead, the ultimate scammers pick off the best brains in every graduating class, corrupting them, making them useless for real work, and wasting lives and fortune with the protection of an entire political party.

 
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