KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Twenty Charged With Medicare Fraud; And Such Crimes Are Emerging As A New Area For Gang Activity

Federal authorities have charged 20 people with Medicare fraud in seven different cases. Those charged alledgedly bilked the government out of about $26 million in unneeded or undelivered medical equipment in California and Las Vegas.

The Los Angeles Times reports that the charges were announced Wednesday in Los Angeles and "came out of a joint investigation by the FBI, U.S. Department of Health and Human Services and California attorney general's office." The cases involve a range of people including a 30-year old Long Beach man who recruited members of a Santa Ana street gang and owners and employees of four medical suppliers (Lin, 10/22).

The Wall Street Journal reports: "Street gangs are getting into a surprising new line of business in southern California: Medicare fraud. ... Some of the defendants allegedly paid members of a Santa Ana gang up to $10,000 to serve as straw owners of medical-equipment companies that submitted false claims for reimbursement to Medicare. Many of the bogus bills allegedly were for expensive powered wheelchairs for individuals who were deceased, or for patients who didn't need them or never received them, authorities said."

"The cases stem from an investigation by the Medicare Fraud Strike Force, which has been probing unusual Medicare billing in four cities -- Detroit, Houston, Los Angeles and Miami. To date, the strike force approach has yielded charges against 331 individuals who allegedly submitted $720 million in bogus bills to Medicare since March 2007, said Lanny Breuer, Assistant Attorney General of the U.S. Justice Department's criminal division" (Burns, 10/21).

The Associated Press reports: "It was the fourth major sweep since U.S. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced in May they were adding millions of dollars and dozens of agents to combat a problem that costs the nation an estimated $60 billion a year. ... As more dangerous criminals are drawn to what was once a white-collar crime, authorities are seeing more violence to settle debts. The tactics include professional hits that generally go unsolved, said Los Angeles County sheriff's Sgt. Stephen Opferman. Under current laws, criminals with violent records, including a convicted murderer, have been able to obtain Medicare supplier licenses. Applicants with felony records can only be rejected if their convictions occurred less than 10 years ago" (10/21).

Meanwhile, in Wyoming, a settlement was reached in a fraud case involved Medicaid, the federal-state program for the poor. The Associated Press reports: "Four pharmaceutical companies have reached a nearly $50,000 settlement with the state of Wyoming for allegedly submitting false claims to the Medicaid program. Wyoming Attorney General Bruce Salzburg says the companies failed to pay appropriate rebates for drugs that were paid for by Medicaid" (10/21).

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