MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
It's not exactly stereotypical "Miami Vice." Amid the beaches and palm trees of South Florida, it turns out to be one of the most popular and lucrative crimes is Medicare fraud. The dollar totals are staggering. So far this year in South Florida alone, law enforcement officials say they've caught more than half a billion dollars in fraudulent claims.
NPR's Greg Allen reports, the federal government is trying to combat this fraud and they say they're seeing results.
GREG ALLEN: 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 sixteen hundred 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 a third of the businesses, 481, didn't exist.
Mr. ALEXANDER ACOSTA (U.S. Attorney, South Florida): And in fact, those 481 so-called businesses that didn't exist had billed $237 million in fraud over the past year.
ALLEN: 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. As part of a crackdown on so-called DME fraud, the federal government revoked Medicare billing privileges for 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 just six months, the strike force has already had an impact. The Justice Department official in charge, Kirk Ogrosky, says it has charged 120 people in 74 cases. And Ogrosky says there's been a dramatic decrease in DME claims submitted from the Miami area, down $1.4 billion from last year. He credits the crackdown and the fact that people convicted of Medicare fraud are now getting stiff sentences.
Mr. KIRK OGROSKY (Deputy Chief for Health Care Fraud, Criminal Division, Justice Department): So people are beginning to realize that getting involved with health care fraud is going to lead to a long prison sentence. And that has a big deterrent effect.
ALLEN: Among those watching the crackdown on DME fraud closest are the many legitimate companies that are trying to operate businesses in a field that's rife with fraud. One is BayShore Dura Medical, a midsize company in Miami Lakes that's been in business nearly 15 years. In the company's 14,000-square-foot warehouse, workers assemble and service motorized rehab wheelchairs. In another area, operations manager Raul Lopez explains a worker is refilling oxygen tanks used in home respiratory systems.
Mr. RAUL LOPEZ (Operations Manager, BayShore Dura Medical): The oxygen is leaving the liquid vessel. It's being converted over and had the CryoVation unit and actually being pumped in to each of those tanks that you see there.
ALLEN: There are three respiratory therapists on staff here, along with two RNs 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 were they five years ago?
Mr. ROBERT MENDIA (Owner, BayShore Dura Medical): This has been going on for years.
Mr. LOPEZ: This is nothing new.
Mr. MENDIA: This is nothing new at all.
ALLEN: Although the business is growing, here and among medical equipment suppliers nationwide, there's a deep frustration 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, CMS. Lopez and Mendia tick down a long list of red flags that Medicare administrators either miss or ignore.
Mr. LOPEZ: For example, you have patients receiving two artificial legs within a year. You have…
Mr. MENDIA: When they never even had anything…
Mr. LOPEZ: …an amputation from a hospital.
Mr. MENDIA: Yeah. Artificial leg, but no amputation.
Mr. LOPEZ: Right.
Mr. MENDIA: Exactly.
ALLEN: Another example, sudden tenfold and hundredfold spikes in billing by a start-up company, all for the same medical condition. After federal inspectors detailed the depth of DME fraud, CMS designated South Florida a demonstration project. It's requiring all medical equipment suppliers to reapply for billing privileges. And in Miami now, Medicare says it will analyze billing data and perform spot inspections with the aim of weeding out fraudulent companies. The head of program integrity for Medicare, Kimberly Brandt, concedes that until recently, CMS didn't actually look for fraud.
Ms. KIM BRANDT (Director, Program Integrity, Centers for Medicare and Medicaid Services): Part of that had to do with our limited resources, quite frankly. In the past, perhaps we have not been as vigilant as we could have. But now, we have definitely recognized the need and we have, certainly, the desire to make sure that we're giving that vigilant oversight in South Florida.
ALLEN: At BayShore Dura Med, 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.
Greg Allen, NPR News, Miami.
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