Feds Fight Rampant Medicare Fraud in South Florida One of the most lucrative crimes in South Florida now is Medicare fraud. A federal task force is fighting it, but legitimate medical equipment providers worry that the crackdown is tarnishing the industry's image.


Feds Fight Rampant Medicare Fraud in South Florida

Feds Fight Rampant Medicare Fraud in South Florida

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It doesn't sound sexy, but amid the bikinis, beaches and palm trees of South Florida, one of the most popular and lucrative crimes now is Medicare fraud, and a team of federal investigators and prosecutors are tasked with putting a stop to it.

The dollar totals are staggering: Law enforcement officials say they've uncovered more than a half-billion dollars in fraudulent claims this year in South Florida alone.

If you want to know how bad Medicare fraud is in Miami, a good place to start is with a study released by federal inspectors. They visited, at random, nearly 1,600 businesses in Miami that bill Medicare for services allegedly delivered to beneficiaries.

The U.S. attorney in Miami, Alexander Acosta, says the inspectors found that nearly one-third of the businesses — 481 — didn't exist.

"Those 481 businesses — so-called businesses that didn't exist — had billed $237 million in fraud over the past year," Acosta says.

That study helped focus national attention on the problem of Medicare fraud in Miami — especially among shell companies that purport to sell what's known as "durable medical equipment" — wheelchairs, walkers, respirators and the like.

Federal Medical Fraud Task Force

As part of a crackdown on the so-called DME fraud, the federal government revoked Medicare billing privileges from more than 600 companies in South Florida. And beginning in March, federal prosecutors and investigators teamed up to create a special Medicare fraud strike force.

In six months, the strike force already has had an impact. The Justice Department official in charge, Kirk Ogrosky, says it has charged 120 people in 74 cases. He says DME claims submitted from the Miami area have decreased dramatically — down $1.4 billion from last year.

Ogrosky credits the crackdown and the fact that people convicted of Medicare fraud are now getting stiff sentences.

"That has a big deterrent effect," he says. "We hope that as we continue ... the billing will continue to decrease and we'll get more in line with what we see around the country."

Business Owner: Fraud Is 'Nothing New'

Among those watching the crackdown on DME fraud closest are the many legitimate companies that are trying to operate businesses in a field rife with fraud.

One is BayShore Dura Medical, a midsize company in Miami Lakes that has been in business for nearly 15 years.

In the company's 14,000-square-foot warehouse, workers assemble and service motorized rehab wheelchairs. In another area, workers refill oxygen tanks used in home respiratory systems. Three respiratory therapists are on staff, along with two registered nurses and more than 70 other employees.

On the issue of Medicare fraud, owner Robert Mendia and manager Raul Lopez have one question about the government crackdown: Where was the government five years ago?

"This has been going on for years," Lopez says. Mendia chimes in, "This is nothing new, nothing new at all."

Industry Faces Bad Reputation

Although the business is growing, there's a deep frustration there — and among medical equipment suppliers nationwide — that their industry's image is being dragged through the mud.

There's anger at the government agency that administers Medicare, the Centers for Medicare and Medicaid Services, or CMS. Lopez and Mendia tick down a long list of red flags that they say Medicare administrators either miss or ignore.

"For example," Lopez says, "you have patients receiving two artificial legs in a year ... when they never had ... an amputation from a hospital."

Another example: sudden tenfold and hundredfold spikes in billing by a startup company — all for the same medical condition.

Making an Example of Miami

After federal inspectors detailed the depth of DME fraud, CMS designated South Florida a demonstration project. It's requiring all medical equipment suppliers to re-apply for billing privileges. And Medicare says that in Miami, it will analyze billing data and perform spot inspections with the aim of weeding out fraudulent companies.

Kimberly Brandt, the head of program integrity for Medicare, concedes that until recently, CMS didn't actually look for fraud.

"Part of that had to do with our limited resources, quite frankly," she says. "In the past, perhaps we have not been as vigilant as we could have [been]."

Brandt says that has changed now. "We have definitely recognized the need and we have certainly the desire to make sure we're giving that vigilant oversight in South Florida."

At BayShore Dura Medical, Lopez and Mendia complain that some of the new CMS rules penalize legitimate companies while still not doing enough to weed out fraud.

They don't deny that fraud is a big problem in durable medical equipment. But they worry that while law enforcement and the news media focus on their industry, they're missing much bigger instances of fraud — committed by doctors, hospitals and drug companies.