STEVE INSKEEP, host:

The government also intends to keep a closer watch on fraud that takes place in the Medicare program.

NPRs Greg Allen reports from Miami, where fraud is a particular problem.

GREG ALLEN: It was a big arrest even for Miami. In December, federal authorities broke up a $40-million Medicare fraud scheme involving home health care services, covered here by Miami TV station CBS 4.

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Unidentified Man: A van carrying some of the 19 people rounded up in this latest Medicare fraud sting left South Floridas FBI headquarters Tuesday morning, bound for court appearances and Federal detention.

ALLEN: Among those arrested was a family doctor whos charged with referring more than 1200 Medicare recipients for home health services they didnt need. The Miami area leads the nation in Medicare fraud and in Medicare fraud prosecutions.

Eric Bustillo, head of the economic crime section at the U.S. Attorney's Office in Miami, says last year alone, his lawyers prosecuted nearly a billion dollars in fraudulent Medicare claims.

Mr. ERIC BUSTILLO (Head, Economic Crime Section, U.S. Attorney's Office, Miami): Right now, we have as many as eight different teams that are full-time, doing nothing but investigating and prosecuting Medicare fraud cases.

ALLEN: Of all the types of health care fraud, schemes that target Medicare are among the most common and lucrative. That's because the $400 billion federal program is a fat and easy target.

From its beginnings in the mid-1960s, until fairly recently, Medicare operated largely on the honor system. Doctors and other health care providers sent in their claims and were reimbursed, often with little follow-up.

In recent years, that's begun to change, in part because of the large amount of money being stolen. Some estimates put Medicare fraud at $60 billion a year, and some experts consider that a low number.

Three years ago, the Justice Department and HHS began setting up special Medicare fraud strike forces. The first was in Miami, and it was an immediate success, saving billions of dollars in fraudulent claims in one county alone.

Assistant Attorney General Lanny Breuer says similar strike forces have now been set up in cities around the country.

Mr. LANNY BREUER (Assistant Attorney General): What we're looking for are quick cases, resolve them fast, and for the sentences to be long. People who are defrauding the Medicare program and are stealing from taxpayers need to go to jail, and they need to go to jail for substantial periods of time.

ALLEN: Recently, strike forces were started in Detroit and Brooklyn, because that's where Medicare fraud was turning up. Eric Bustillo with the South Florida U.S. Attorney's Office says it turns out that many of those schemes were developed by criminals from Miami.

Mr. BUSTILLO: In many instances, these individuals knew that the likelihood that law enforcement was going to catch wind of it was fairly significant. And so they that decided, you know what, let me take it to another state where there's not the same level of scrutiny.

ALLEN: Federal officials say every dollar spent on the strike forces is returned several-fold in the fraudulent claims that are stopped.

But Medicare fraud schemes shift rapidly in location and also in the part of the Medicare program they target. One of the first popular scams focused on durable medical equipment - wheelchairs, walkers and the like. Later, fraud perpetrators moved to HIV infusion clinics, and most recently, home health care.

It's a cat-and-mouse game, with law enforcement chasing an ever-changing array of schemes in a growing number of cities.

Calvin Sneed is a former investigator with Health and Human Services who now helps combat fraud as a consultant to Blue Cross and Blue Shield. He believes the federal government might learn a lot from the way private insurance companies guard against fraud, such as analyzing claims submitted by doctors and other health care providers before they're paid.

Mr. Calvin SNEED (Consultant, Blue Cross and Blue Shield): The enforcement is very, very expensive. And if you are paying and chasing, the dollars that you're spending to pay and chase is exponentially higher to go after that money and then recover it, than it is to invest that money on the front end and catch that money before it goes out the door.

ALLEN: In the last few years, the Centers for Medicare and Medicaid Services, CMS, has begun examining the pattern of claims and working with law enforcement to identify areas where fraud seems likely.

It's an effort now slated to be stepped up. In its new budget, the Obama administration has requested an additional $250 million double the amount from last year's budget to help CMS identify and stop health care fraud.

Greg Allen, NPR News, Miami.

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