''It's those few people who have ruined this industry,'' said Jack Marquez, AMEPA's vice president and owner of Cobra Medical Equipment in Miami. ``I'm sometimes embarrassed to say I'm a durable medical equipment business owner due to all the healthcare fraud in South Florida.''

The number of medical equipment suppliers in South Florida -- about 2,100 -- changes weekly because they have multiplied in storefront office buildings and strip centers. The bogus ones can pack up and leave as soon as they make their money.

No particular healthcare or business skills are required to open such a business -- not even a surety bond to guarantee delivery of Medicare-covered services.

Although the Centers for Medicare and Medicaid Services is mandated to do criminal background checks on some healthcare operators under 2006 federal regulations, the agency said it only started doing them in December for medical equipment suppliers in ''high fraud'' areas such as Miami and Los Angeles. The agency can revoke or deny the license of a provider who has had a felony conviction within 10 years. But funding for the limited screening of Medicare applicants expires in September, said agency spokesman Peter Ashkenaz.

Once the agency verifies that a start-up has met some minimal requirements -- including maintaining a small amount of medical supplies -- a provider can bill repeatedly for items, from sterile gauze to oxygen concentrators to artificial limbs.

Fraudulent medical equipment suppliers use patients' Medicare numbers without permission. In effect, they steal their Medicare IDs, which are Social Security numbers, eliminating the risk of bringing actual patients into their schemes.

Lawless providers also bribe physicians and their assistants to write fake prescriptions, or they obtain physicians' personal ID numbers off the Internet and use them without their approval.

One example: Dr. Pedro Cuni, a physician who pleaded guilty in 2006 to writing unnecessary prescriptions for more than 6,000 patients and receiving $50 kickbacks each time from a Hialeah clinic. Cuni, 77, testified for prosecutors at the fraud trial of Dr. Ana Caos in April, saying that at the ''Cuban clinics in Hialeah,'' Medicare patients would be recruited to request prescriptions for bogus back or respiratory problems. In turn, the clinics billed Medicare for unnecessary medications that patients threw in the garbage.

Caos, 62, was found guilty of accepting $100 kickbacks for writing prescriptions for homemade compounded medications billed to Medicare that patients did not need or want. She was sentenced in July to more than three years in prison.

DEAD DOCTORS

In a new congressional report, investigators said Medicare paid an estimated $92 million to medical equipment providers that improperly used the identification numbers of 18,240 dead doctors in Miami and other major cities between 2000 and 2007. Many are still listed as active Medicare physicians, even though they died 10 to 15 years ago.

Medicare, which was criticized for this type of lax oversight in 2001 by the Health and Human Services inspector general, still has no way to catch claims involving deceased doctors, the Senate Permanent Subcommittee on Investigations said.

All of Medicare's woes add to the anxiety of some 44 million beneficiaries -- including 3.1 million in Florida -- who need and deserve the healthcare benefits.

Marjorie Sayre, 80, said her husband complained to Medicare for a year about medical equipment companies that filed fraudulent claims in his name. Among the claims: an artificial leg for a man who still had full use of all his natural limbs.

''There are people who need the money, and Medicare is going downhill because they don't have the money,'' said Sayre, of Southwest Miami-Dade, whose husband, William, died last year.

''It's really frustrating to think that these people are so dishonest that they will probably have a wonderful time with the money,'' she said. ``I can't afford to go to Hawaii and they're probably traveling all around the world.''

SYSTEM BREAKDOWN

Almost everyone agrees Medicare is easy to rip off because it has functioned as an honor system since Congress adopted the health insurance program in 1965. Medicare and its private contractors are required by law to review and pay bills within 14 days, leaving the system vulnerable to criminals who churn claims.

For its part, Congress has done little to oversee and prevent Medicare fraud because of other political priorities, industry lobbyists and campaign donations.

Combined, those influences have undermined attempts to shore up the fragile program for those who need it the most.

''Unless a radically different approach is taken to address the fraud, it's potentially terminal for the Medicare program,'' said Malcolm K. Sparrow, a professor at Harvard University's John F. Kennedy School of Government and author of License to Steal: How Fraud Bleeds America's Health Care System.

Representatives of the medical equipment industry, which has been pounded by fraud-related publicity, said the Centers for Medicare and Medicaid Services has improved its checks and balances slightly since prosecutors began exposing more fraud over the past year.

But since elderly and disabled patients still receive their Medicare services, there's no regulatory or political will in Washington to confront the crisis.

''There's no rush to solve the problem because it's not their money -- it's taxpayer money,'' said Rob Brant, general manager of City Medical Services in North Miami Beach and president of Accredited Medical Equipment Providers of America.

And that indifference has allowed fraud to spread like an epidemic.

Early last year, the U.S. attorney's office in Miami and Justice Department established the nation's first-ever Medicare Fraud Strike Force.

While the team doubled prosecutions -- and reduced total Medicare claims by roughly $1.75 billion in Miami-Dade -- authorities admit that the system has become so vulnerable that they cannot possibly keep up with the billions lost annually to fraud.

''We could double our prosecutions and still not stop the fraud,'' Acosta, the U.S. attorney, said. ``Only Medicare has the ability to close the floodgates.''

Coming Monday: An inside look at the two largest scams in Medicare: HIV-infusion claims and the medical equipment providers.

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