Organized Crime Muscles In On Health Care

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This week, federal agents arrested more than a dozen people in the Detroit area in a $14 million Medicare fraud scheme that focused on home health care. The investigation was launched by a federal strike force that is trying to crack down on Medicare and Medicaid fraud. Scott speaks to Tim Menke, deputy inspector general for investigations at the Department of Health and Human Services, about how organized crime and street gangs have been getting in on health care fraud.

SCOTT SIMON, host:

This week, federal agents arrested more than a dozen people in the Detroit area in a $14 million Medicare fraud scheme that focused on home health care. Investigation was launched by a federal strike force that's trying to crack down on Medicare and Medicaid fraud. Tim Menke is on that strike force. He's the deputy inspector general for investigations at the Department of Health and Human Services. Thanks so much for being with us.

Mr. TIM MENKE (Deputy Inspector General For Investigations, Department of Health and Human Services): Hi Scott, good to be here.

SIMON: What are some of the alleged crimes?

Mr. MENKE: Well, its a crime that is very common and that is setting up a phony billing system with a home health agency, and what will happen is a beneficiary may be approached, and unfortunately now it seems like in economically depressed areas because they tend to be an easier target for these recruiters. The beneficiary will be offered several hundred dollars for all of their Medicare or Medicaid information. The recruiter will then compile a list and then that recruiter will get paid roughly $300 to $400.

The crook at the top who set up the phony company then takes that list and starts billing Medicare because on the surface it appears the crook got a legitimate provider's license and a provider number.

SIMON: Potentially, how big is Medicare and Medicaid fraud in this country?

Mr. MENKE: Roughly $60 billion a year, and we recover about $4 billion a year with (unintelligible) - the office of the inspector general. But its just tip of the iceberg. And we see many different patterns across the United States and were using data analysis to hone in on this criminal activity and bring these people to justice.

SIMON: I understand that organized crime and even street gangs have gotten into the act.

Mr. MENKE: Absolutely.

SIMON: Because its so lucrative?

Mr. MENKE: Absolutely. Its lucrative and its safe for them. Why rob a bank and risk getting shot when you can click a mouse and bill Medicare or Medicaid, basically lie on some forms and make millions of dollars doing so.

SIMON: So if Tony Soprano were real, he conceivably could be clicking the mouse to steal money.

Mr. MENKE: Conceivably, but the way we look at organized crime isnt any particular group or category. Weve seen multiple different cultures engaging in organized criminal activity. We see Armenians, Cubans, Nigerians, Russians, Ukrainians, you name it across the board. Theyre using very similar methods. And whats disturbing now is were seeing a viral nature of health care fraud going across the United States where some of these groups are actually merging.

SIMON: You know, the litany of getting rid of waste, fraud and abuse has been going on for a generation or more. Im going to risk asking you, if you, if you think some of the projections that have made about how much money could be saved and maybe poured into health care overhaul plan are realistic.

Mr. MENKE: Well, first of all, Im nonpolitical. So, the bottom line is I can tell you what we recovered. Last year we recovered $4 billion, but I feel thats just a tip of the iceberg. Its kind of hard defining how much fraud is actually out there, and its almost like how many stars are in the sky billions. Those are the ones we can see.

SIMON: What are the kind of stories you tell when you can, when you go home or talk to friends about some of the more outrageous things you've discovered?

Mr. MENKE: The sheer level of fraud that were seeing, the audacity, the violence. I think were a little concerned because of some of the things were finding on search warrants. Historically, weve taken boxes of paper in a typical fraud investigation. Now, because of the organized crime and street gang influence, were taking machine guns, automatic weapons, out of facilities that are engaged in health fraud. Thats a little disturbing for me. I have roughly 500 special agents assigned to work this health care fraud and it puts a whole new spin on things. Its not the traditional white collar fraud that we were working five years ago. Its getting edgier and more dangerous.

SIMON: Tim Menke, deputy inspector general for investigations at the U.S. Department of Health and Human Services, thanks very much.

Mr. MENKE: Thanks Scott, I appreciate it.

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