Medicare was billed about $75,000 last year by a company that claims it sent a nurse twice a day to a Westchester group home to inject an elderly diabetic with insulin.

Except that 92-year-old Maria C. Perez isn't diabetic. She says so. Her son says so. Her family doctor says so, and her medical records confirm it.

"I've never been diabetic, " Perez softly declares. "I've never had any of those problems."

Medicare suspects that taxpayers are footing the bill for thousands of homebound patients like Perez to receive unnecessary diabetic treatments -- unnecessary because the patient either doesn't have the disease or doesn't need a visiting nurse to inject the insulin.

It's "easy prey -- fast money, " said Perez's son, Rolando, a Coral Gables businessman who complained to Medicare for months about his mother's suspicious bills. "It's like a giant ATM machine and [the homecare operators] got the passwords, because the amount of money inside the ATM is unlimited."

In an unprecedented move, Medicare has suspended millions of dollars in payments to the top 10 home healthcare agencies in Miami-Dade County, including one called Home Care Services Provider -- the company that billed Medicare for insulin treatments that Perez said she has never needed and didn't receive.

Medicare issued the suspensions in October after finding that it spends one of every 15 dollars on home healthcare nationwide in one county -- Miami-Dade. Medicare's total budget: $16.5 billion.

Kendall-based Home Care Services Provider denies any wrongdoing. And it has challenged the payment suspension in federal court. A hearing is scheduled for Tuesday.

In August, a Miami Herald series exposed billions of dollars in fraudulent claims billed to the taxpayer-funded insurance program for medical equipment and HIV treatments in South Florida. Since then, Medicare has taken a hard look at billing practices in the home healthcare industry in Miami-Dade. The county is largely to blame for the region's reputation as the Medicare fraud capital of the nation.

'SOMETHING IS FISHY'

What Medicare found is that it is losing potentially hundreds of millions of dollars a year in Miami-Dade to fraud, abuse and waste in home healthcare. The situation has spun so out of control in recent years that authorities are about to file criminal indictments.

"No matter what we seem to do, it's not making the problem go away, " said Kimberly Brandt, Medicare's fraud watchdog. "Something is fishy."

Members of Congress have asked the General Accountability Office and the Office of the Inspector General of the U.S. Department of Health and Human Services to investigate.

Here's why the home healthcare system is so easy to exploit: The state has no limit on the number of home healthcare agencies -- as it does, say, with hospitals. Medicare doesn't require physicians to see the patients they refer to homecare providers for expensive treatments. And, perhaps most significantly, Medicare is notorious for paying bills quickly without verifying whether the claims are legitimate.

Since 2001, Medicare's payments for home healthcare in Miami-Dade have grown by a whopping 1,750 percent -- to $1.3 billion -- while the pool of people over 65 diagnosed with diabetes grew by just 30 percent.

Put another way, Medicare's Miami-Dade payments for home healthcare grew at a pace 13 times the national rate.

Los Angeles and Dallas, two other cities with high homecare billing activity, don't come close to Miami-Dade's. Medicare's average annual expense for a homecare patient is $19,230 in Miami-Dade -- 164 percent more than in Los Angeles and 91 percent more than in Dallas.

"I would have to attribute a lot of this activity to fraud to extract money from the system, " said Jeff Gregg, a senior regulatory official at the Florida Agency for Health Care Administration, which licenses Medicare and Medicaid providers. "As far as I can see, there is no other plausible explanation."

In Miami-Dade, the U.S. attorney's office is gearing up to file the first major home healthcare fraud cases in this decade.

Federal authorities -- who have indicted 768 defendants since 2004 on Medicare fraud charges involving medical equipment and HIV therapy scams totaling billions of dollars -- would not confirm whether any of the top 10 suspended home care providers are criminal targets.

But they acknowledged current investigations into several Miami-Dade home care operators.

Randall Culp, an FBI special agent who works with the Medicare Fraud Strike Force in Miami, said there are "black and white fraud cases out there."

Among them: home healthcare agencies that misappropriated physicians' ID numbers to file false claims for services that were not provided. Those providers are also suspected of fabricating documents to justify billing statements.

"We need to focus on the fraudsters so the legitimate patients can continue to receive these services, " said Miami U.S. Attorney R. Alexander Acosta.

EARLY SIGNS OF FRAUD

The first round of Medicare suspensions in Miami-Dade were based on "reliable information" that home care claims submitted last year "may have involved an overpayment, fraud or misrepresentation, " according to an Oct. 3 Medicare letter sent to the targeted companies. The letter noted that certain physicians had told Medicare that their signatures didn't match those on prescribed patient care plans submitted to home care providers.

Kerry Weems, acting administrator for Medicare, said the agency will start with audits of the top 10 providers and move on to others with suspicious claims in Miami-Dade.

He said the goal is to stop fraud, recover millions of dollars in improper payments, and prevent the problem from spreading to other parts of Florida and the country.

"We want to tamp this down now, so if we see it again elsewhere, we can stop it even sooner, " Weems said. "We're not going to play catch-up."

Cecilia Franco, director of Medicare's Miami field office, said part of the problem is that some patients are likely receiving kickbacks -- money, groceries or cleaning services -- from home care providers so they can bill Medicare for the unnecessary nursing visits.

INCIDENTS IN S. FLORIDA

For months, Medicare nurse investigators have been visiting the homes of diabetic patients in Miami-Dade and Broward counties, uncovering cases of dubious claims as well as outright fraud.

Some examples:

* In Miami Beach, Medicare nurses visited a retired man who had been dropped as a homebound diabetic patient by a local healthcare provider. They realized that the man didn't have diabetes, yet the provider had been billing Medicare for multiple daily nursing visits to inject his insulin.

"The documentation indicated that someone had been going to his home two to three times a day and that he was being treated, " said Suzanne Bradley, a Medicare nurse and lawyer. "But he didn't even have the [insulin] vials in his home. It so underscored that he wasn't a real diabetic."

* In Pembroke Pines, the Medicare nurses found a retired engineer who kept a meticulous notebook of his daily blood-sugar level and insulin shots. He said that he did his own injections and that a home care nurse visited twice daily only to check his blood pressure. Yet, Medicare was being billed for twice-daily injections by the nurse, at the U.S. government's expense.

* Also, an elderly South Florida couple, both diabetic for years, said they, too, could check their own blood and inject their own insulin. They also were not technically homebound, because they drove each other around. Bottom line: The couple didn't need a nurse to inject their insulin twice a day, with Medicare paying the bill.

In Miami-Dade, Medicare's suspensions have jolted the local industry. One provider on Medicare's target list, Patient Care Inc., sent a letter last month to Medicare, saying it was "being unfairly herded into the slaughterhouse as a result of its success and not a single shred of evidence."

According to federal records, Medicare paid Patient Care about $12.6 million last year. A little more than 70 percent of its income was for treating homebound diabetic patients, records show.

"These actions, taken on the part of [Medicare] are unprecedented and dangerous, " company owner Mercedes Menendez wrote, citing the potential disruption of services for thousands of homebound patients.

Medicare officials said "legitimate" patients will continue to receive services as they review Patient Care's and other providers' records to determine who actually needs home treatment.

Diabetics suffer from high blood sugar due to an insufficient amount of insulin. Most diabetics manage the disease by giving themselves insulin injections or taking the medicine orally.

SUING MEDICARE

In a lawsuit, Home Care Services Provider says Medicare exceeded its authority with the payment suspensions. Home Care received $12 million in Medicare payments last year, with about 72 percent of its income derived from treating mostly homebound diabetic patients, records show.

Among those patients was Maria Perez. Last year, she was living in a group home in Westchester, under the supervision of owner Francisca Vazquez. On May 31, 2007, a Hialeah doctor diagnosed her with diabetes and then referred her to Home Care Services Provider for insulin treatments.

Medicare was billed roughly $75,000 by Home Care Services Provider for twice-daily nursing visits to inject her with insulin to control diabetes during the latter half of 2007.

In a September interview, Vazquez repeatedly told The Miami Herald that no one from Home Care Services Provider or any other agency ever came to her residence to treat Perez. "Only I take care of her, " Vazquez said.

Perez's family doctor says she has never been diabetic. Perez's son provided The Miami Herald with hospital test results this week showing her blood sugar level as normal.

Medicare records show that the diabetes referral to Home Care Services Provider was made by Dr. Wayne H. Case on June 1, 2007.

Dr. Case would not comment on the matter, according to his office manager, Clara Tejada. She did say that another physician in the office -- not Case -- actually examined Perez in advance of the referral. She said the other doctor also declined to comment.

Home Care's nursing director, Minerva Rodriguez, and the agency's office manager, Grisel Diaz, both said the home visits billed to Medicare took place between June and November 2007.

Home Care's lawyer, Louis Martinez, said in a statement that two licensed nurses injected Perez's insulin twice daily at the Westchester home during that period.

In the statement, he also said that Vazquez signed an affidavit confirming she had signed off on the company's services for each nursing visit. Reached by phone Saturday, Vazquez confirmed she signed the affidavit and said that she didn't recall previously talking to a Miami Herald reporter about Home Care's services.

That initial interview with a woman who identified herself as Francisca Vazquez was videotaped and is posted online at MiamiHerald.com.

Home Care said in its statement it "is not aware of any fraudulent activities relating to this patient."

But Perez's son, Rolando, insisted that his mother never saw anyone in Dr. Case's office or received any Home Care insulin treatments at the Westchester house.

Rolando Perez said he formally complained to Medicare a year ago about Home Care Services Provider's claims, to no avail. Summaries of her Medicare bills show that taxpayers paid $28,000 in reimbursements for nursing visits that he says his mother never received.

The son put a stop to the home care charges last December, contending that the provider exploited his mother, who now lives in a West Miami-Dade nursing home.

Said Rolando Perez: "I'm not going to look the other way when this fraud is eating us all alive."