Dozens arrested in national Medicare fraud bust

Jul 30 2009

The Associated Press reports: "Federal authorities arrested more than 30 suspects, including doctors, and were seeking others in a major Medicare fraud bust Wednesday in New York, Louisiana, Boston and Houston, targeting scams such as 'arthritis kits' - expensive braces that many patients never used.

More than 200 agents worked on the $16 million bust that included 12 search warrants at health care businesses and homes across the Houston area, where the bulk of the arrests were made. Federal authorities say those businesses were giving patients 'arthritis kits,' which were nothing more than expensive orthotics that included knee and shoulder braces and heating pads. Patients told authorities they were unnecessary and many never even received them. But health care clinic owners billed between $3,000 to $4,000 for each kit. ...  In some cases, clinic owners billed patients who were dead when they allegedly received the items" (Kennedy, 7/29).

The Wall Street Journal reports: "More than $800 billion is spent annually on Medicare and Medicaid, the joint federal-state program for the poor, and by some estimates more than $60 billion each year is lost to fraud. Such lost money is part of the debate on Capitol Hill on President Barack Obama's push for health-care reform. ... Since March 2007, the government's special antifraud teams have produced 293 indictments involving Medicare claims totaling $680 million in such Medicare-fraud 'hot spots' as South Florida, Los Angeles and Detroit, where abuses of the federal health program for the elderly and disabled are more frequently found. The strike forces have obtained nearly $300 million in restitution" (Kingsbury, 7/29).

The Houston Chronicle reports: "The operation by the newly formed Houston Medicare Fraud Task Force underscored U.S. Justice Department warnings that the Houston metropolitan areas has become a major front in the government's battle to clamp down [Medicare fraud]. Tim Johnson, the U.S. attorney in Houston, warned other violators that Wednesday's roundup marked the beginning of a lengthy federal investigation that will lead to more arrests in the future."

The Houston Chronicle notes: "Investigators say one reason Medicare fraud is on the rise in Houston is a steady influx of immigrants who, in some instances, consider gaming the government for benefits an acceptable practice, said one top Justice Department investigator, speaking on condition he would not be identified" (Pinkerton, 7/29).