Crackdown on Medicare Fraud Is Producing Some Impressive Results
Policy + Politics

Crackdown on Medicare Fraud Is Producing Some Impressive Results


In the latest chapter of the Obama administration’s crackdown on Medicare fraud, U.S. customs officials arrested a woman at the Dallas-Fort Worth International Airport last week who is accused of taking part in one of the biggest Medicare fraud schemes in history.

The suspect, Lidia Antonio, 57, is one of a dozen people from the Dallas-Fort Worth area suspected of taking part in a nationwide scam to defraud Medicare of $900 million, according to U.S. Attorney General Loretta Lynch. They did it, among other ways, by billing for bogus ear care procedures purportedly done on elderly nursing home patients, including some who were unconscious. Some health care providers offered kickbacks to “patient recruiters” to help assemble bogus patient information.

Related: Doctors and Nurses Charged in Massive $900 Million Medicare Fraud

The government’s Medicare Fraud Strike Force investigation of the scam has resulted in the arrests of 301 people across the country, including 61 doctors, nurses and other medical professionals. If convicted, Antonio faces a maximum of 10 years in prison and a $250,000 fine, according to The Dallas Morning News.

After years of losing tens of billions of dollars through Medicare fraud, Justice Department and Health and Human Services officials, the FBI, government agency inspectors general, auditors and others have made important headway in slamming the door on fraudulent activities by doctors, hospitals, nursing home facilities, recruiters and conspiring patients.

At the beginning of his second term, President Obama made combatting Medicare and Medicaid fraud a top priority – a decision that has led to a series of high-profile arrests and prosecutions by federal and state law enforcement agencies.

Last June, the administration notified Congress that it had prevented $42 billion of improper payments to doctors and other medical providers in fiscal 2013 and 2014 by using more sophisticated “big data” detection methods.

Related: Billions in Medicare Fraud Still Rampant Despite Federal Crackdown

Since 2010, the administration’s fraud taskforce has arrested and prosecuted about 1,200 people allegedly involved in defrauding Medicare and Medicaid of more than $3.5 billion, according to the Justice Department.

“The government has a strong hammer and they’re using it to the extent they can catch up with the fraud,” said John Washlick, a Philadelphia attorney who specializes in health care systems and corporate compliance and has vast experience in fraud cases, in an interview.

The government now routinely collects billions of dollars annually in settlements and judgements against hospitals, nursing homes, drug companies, medical suppliers and physicians, Washlick noted, with each year’s recoveries exceeding those of the previous record-setting year.

Related: Medicare Drug Program Still Plagued by Fraud 

There was a time when the government responded to Medicare fraud with a slap on the hand and a fine, but those days are over. Now, many more individuals are being prosecuted on criminal charges and sentenced to significant jail terms for their involvement in schemes designed to pay kickbacks for referrals or other business.

The Inspector General’s office for Health and Human Services and other government watchdog agencies have also been helped significantly by provisions of the 2010 Affordable Care Act.

The Obamacare law provides resources for combatting Medicare fraud and requires anyone who has knowledge that they are in receipt of federal overpayments in violation of federal anti-kickback laws to report that to authorities within 60 days. If they don’t, they face penalties, prosecution or disbarment from the federal health programs. Moreover, any individual within a health care organization can blow the whistle on wrongdoers and share in a bounty of up to 25 percent of whatever is collected by the government.

Related: Report Uncovers Widespread Medicare Fraud in Hospice Care

Even so, enforcement agencies are woefully understaffed and underfunded given the volume of fraudulent schemes that seems to keep growing, according to Washlick.

A potential wildcard in all of this is the government’s decision to significantly alter Medicare’s payment and reimbursement system for doctors and other health care providers that was announced recently by the White House and the Centers on Medicare and Medicaid Services (CMS).

The new rules, an outgrowth of bipartisan legislation approved by Congress last year to change the way physicians are paid, are designed to shift the medical system toward rewarding quality over quantity of treatment and save hundreds of billions of dollars in the coming years, starting in 2019.

Related: Audit Uncovers $124.7 B of Overpayments and Fraud in Medicare and Medicaid

Washlick, a lawyer with Buchanan, Ingersoll & Rooney, said that the proposed new reimbursement plan potentially might be susceptible to gaming, including the way doctors code or classify their patients’ conditions and evaluate their quality of care. However, he added, there will be many backstops to prevent such cheating by health care providers, including close scrutiny by CMS.

Moreover, switching to a more results-oriented system still won’t address the problem of the fraudulent recruiting and exploitation of Medicare patients. Washlick said that the new efforts to reward quality of service over quantity makes considerable sense. “But it seems like a lot of fraud and abuses is really perpetrated through disguised payments from one vendor to another vendor, or from a vendor to a health system provider, or to influence referrals upstream,” he said.

“Those payments, when you’re rewarding referrals upstream, and rewarding providers for purchasing goods or services or equipment, that’s kind of all outside the new system of billing of services you are providing to a patient,” Washlick added. “And that’s the part that is the egregious piece.”