Watchdog Report

MEDICARE FRAUD

Nurse takes down phony equipment dealers

 

Federal inspections of about 1,500 medical equipment businesses in South Florida found that about one-third did not exist or were closed. Those ghost providers were paid $97 million by Medicare in 2006.

jweaver@MiamiHerald.com

The sign on Suite No. 315 says ``Open 9 a.m. to 1 p.m.''

But the Hialeah medical equipment business -- suspected of billing the U.S. government a few million dollars in bogus Medicare claims -- is locked on a recent weekday visit by federal agents.

Angel Diaz, a handyman for the property manager, unlocks the door for FBI agent Brian Waterman. He spots a small table with tiny boxes of glucose blood tests for diabetics.

''Does this look like a multimillion-dollar operation to you?'' Waterman says as he scans the nearly empty suite.

''No, sir,'' Diaz says, ``not even $200. I've never seen anybody come into this office.''

The vacant business at 900 W. 49th St., a high-rise notorious for illegal medical equipment providers, is suspected of being among hundreds of healthcare suppliers in South Florida that bilk the nation's healthcare program out of millions of dollars, according to federal agents.

It was flagged by Peggy Sposato, a registered nurse who is part of a 50-person Medicare Fraud Strike Force established in March 2007 by the U.S. attorney's office and U.S. Department of Justice. The strike force, based in Miramar, is responsible for criminal investigations -- not enforcing Medicare's regulations.

In early spring, Sposato, who is trained to spot suspicious claims, noticed the Hialeah business -- approved by Medicare as a diabetic equipment supplier -- billed $2.7 million over two months for equipment that had nothing to do with treating diabetes. Among the suspicious items: tracheotomy suction pumps, canisters and tubing.

''Because of their astronomical number, I jumped on it,'' said Sposato, who is the only nurse in the country working on federal healthcare criminal investigations.

Medicare-approved equipment companies like the Hialeah one have dotted South Florida for decades. For the most part, they've operated under scant scrutiny by federal regulators.

In March 2007, the U.S. Department of the Health and Human Services Office of Inspector General scolded Medicare for allowing questionable medical equipment businesses to bill the government program for hundreds of millions of dollars.

UNANNOUNCED VISITS

According to a critical report, federal agents made unannounced visits at 1,581 medical equipment businesses in South Florida and found that one-third did not exist or were closed. Those 491 providers, mostly in Miami-Dade, billed Medicare for $237 million and were paid $97 million in 2006.

How do they get away with it? Superficial oversight by the Centers for Medicare and Medicaid Services, which manages the government health insurance program and retains private contractors to process bills.

In South Florida, medical equipment suppliers have invented more and more schemes to dodge detection by law enforcement officers and regulators. Many pay bribes to Medicare patients to use their numbers for bogus billings, but they also buy and sell stolen Medicare patients' lists to bill the healthcare program. Actual business owners pay kickbacks to associates to use their names as straws to cover up their roles in the companies. They also misappropriate physicians' identification numbers on the Internet or pay them kickbacks to write prescriptions.

Another part of the scheme: Medical equipment suppliers in the Southeast, based mainly in Miami-Dade, used the names of 2,454 dead doctors for prescriptions to file Medicare claims and got paid $3.9 million in reimbursements from January 2007 to the end of June, according to records obtained by The Miami Herald.

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