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It's not like this was a hard crime to spot. More than 50,000 of the bogus claims involved doctors who had been deceased for at least ten years. Despite a warning from the Department of Health & Human Services (HHS) in 2001 about exactly this problem, tough safeguards were never put in place. Here's another good one: the podiatrist who allegedly billed the government for treating people with no feet. Dr. David Quang Pham was indicted in St. Louis this past June for charging the government for nonexistent procedures that he backed up with phony notes (Pham has pleaded not guilty). As an unforgettable press release from the local U.S. Attorney's office put it, "Dr. Pham submitted reimbursement claims for treating the feet of patients whose feet had been amputated prior to the dates of service." And once again, it was the taxpayer who had to, er, foot the bill.
Unfortunately, the bigger issue here is no joke. Prosecutors across the country are scrambling to keep up with an epidemic of fraud and abuse?in our public health-care system. As President Obama seeks to reform health care, honest people can disagree about the best approach. But there's no disputing one important truth: Shocking amounts of money are stolen by crooked doctors and scammers, and that's driving up costs for all of us. The National Health Care Anti-Fraud Association estimates that more than $60 billion a year is lost to fraud—or 3 percent of federal health-care spending. Think of how all that money could improve, extend, or outright save lives.
Sadly, though, the shameless scammers are only getting more audacious. Take the case of Michael De Jesus Huarte. Huarte?and his co-conspirators set up 14 health-care clinics to treat illnesses like cancer and AIDS and billed the government for $70 million in Medicare and Medicaid reimbursements. But those clinics had no real patients. Working with seven associates, prosecutors alleged in June, Huarte paid people for their personal information, which he then entered into government forms. Two of his clinics, in greater New Orleans, were empty storefronts with handwritten business signs. Says acting U.S. Attorney for South Florida Jeffrey Sloman, the case has "taken health-care fraud to a new level. The breadth and scope of the scheme is different from what we've ever seen before."
Last year, Alex Acosta, then the U.S. Attorney for South Florida, had his agents inspect 1,581 medical equipment companies. "We had really tough standards," he says. "Are they open? Do they have a telephone? Four hundred and ninety-one of them failed." The companies, all told, had billed Medicare for $97 million. In another case, agents found that a "pharmacy" supposedly selling nebulizers for asthmatics was actually a broom closet. The "pharmacist" was an air-conditioning repairman, Acosta says.
But worse than con artists posing as medical professionals are the doctors who put their patients through unnecessary procedures for a little extra cash. In?Michigan, dermatologist Robert Stokes routinely removed minor skin blemishes he claimed were cancerous, terrifying his patients and jacking up his reimbursements from Medicare and Blue Cross of Michigan. Stokes is now serving a ten-and-a-half-year prison term. In Oregon, doctor Randall Smith billed insurers for a bogus procedure he performed on a patient to relieve her pelvic pain: massaging her "trigger points," which soon led to intercourse. That earned him just two months in prison. In September 2005, Pennsylvania dentist Alireza Asgari pleaded guilty to performing unnecessary root canals on his patients, including four on one woman who didn't need them.
The Justice Department and HHS have finally stepped up efforts to crack down on such abuse. Since last October, they've won 300 convictions and recovered nearly $1 billion. But most watchdogs agree that's just a start.?More funding and investigators are needed.
New laws and regulations are needed too. In January 2007, Medicare shut down 18 medical equipment suppliers in Florida after investigators discovered they were phony. But the companies were reinstated on appeal—only to be indicted several months later, after they had been paid another $5 million in taxpayer money. Loopholes that allow quick reinstatements—often after just a sworn statement from owners—must be closed.
With health-care reform at center stage, it's a perfect opportunity to take action. But the government has dropped the ball before. In the 16 years that his group has been around, says Dennis Jay, executive director of the Coalition Against Insurance Fraud, fraud prevention has gone from "abominably bad" to "very weak." He adds, "It still has a long, long way to go for taxpayers to feel comfortable that their dollars are being well spent." True change may take some time. But here's one small step Washington could take right away to restore some confidence:?Make sure that doctors collecting our dollars still have a pulse.
Do More
- Blow the whistle. The feds have set up a website where you can report Medicare and Medicaid fraud: stopmedicarefraud.gov.
- Show your support. A few U.S. senators are focusing on health-care fraud, including Republicans Mel Martinez of Florida and John Cornyn of Texas, who have proposed a Seniors and Taxpayers Obligation Protection (STOP) act to implement new fraud-prevention practices. Call Martinez at 202-224-3401 and Cornyn at 202-224-2934 and tell them to keep fighting.
- Learn more. The National Health Care Anti-Fraud Association and the Coalition Against Insurance Fraud (check out its Hall of Shame) keep close tabs on fraud cases and what the authorities are doing about them.
Michael Crowley is a senior editor at the New Republic.
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