When it comes to 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.
The Obama administration, which has otherwise proposed a spending freeze on many federal programs, has requested an increase for an effort to crack down on Medicare fraud.
The government's effort to root out scams has proven successful in the Miami area, which leads the nation in Medicare fraud and in Medicare fraud prosecutions.
In December, federal authorities broke up a $40 million Medicare fraud scheme involving home health care services. Among those arrested was a family doctor who is charged with referring more than 1,200 Medicare recipients for home health services they didn't need. It was big even by Miami standards.
Eric Bustillo, head of the economic crimes section at the U.S. Attorney's Office in Miami, says last year alone, his lawyers prosecuted nearly $1 billion in fraudulent Medicare claims.
"Right now, we have as many as eight different teams that are full-time, doing nothing but investigating and prosecuting Medicare fraud cases," Bustillo says.
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 has 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 the Department of Health and Human Services 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.
"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," Breuer says.
Recently, strike forces were started in Detroit and Brooklyn because that's where Medicare fraud was turning up. It turns out that many of those schemes were developed by criminals in Miami, says Bustillo, of the U.S. Attorney's Office.
"In many instances, these individuals knew that the likelihood that law enforcement was going to catch wind of it was fairly significant. So they decided, 'Let me take it to another state, where there's not the same level of scrutiny,' " Bustillo says.
Federal officials say every dollar spent on the strike forces is returned several-fold in 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 such as wheelchairs and walkers. 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, a former investigator for Health and Human Services, now helps to combat fraud as a consultant to Blue Cross Blue Shield. He says 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.
"The enforcement is very, very expensive. And if you are paying and chasing, the dollars 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," Sneed says.
In the past 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.