Fueled by massive fraud, home healthcare providers in Miami-Dade County are raking in more Medicare money than their colleagues in the rest of the country combined -- thanks to bogus billings for patients with diabetes, authorities say.

Now, Medicare is taking tough steps to stop agencies from filing hundreds of millions of dollars a year in false claims.

The federal agency is proposing a nationwide cap that would reduce Medicare reimbursements to any agency treating homebound patients with diabetes or other chronic ailments. The proposed limit: 10 percent of the bill.

Though national in scope, Medicare's plan is really aimed at shutting down hundreds of home healthcare agencies in Miami-Dade suspected of submitting phony claims for twice-daily insulin injections by a visiting nurse, officials said.

``We looked at [Miami-Dade] as an albatross because it was weighing us all down,'' said William Dombi, a vice president at the National Association for Home Care and Hospice, a Washington trade group that pitched the 10 percent cap to Congress. ``It's beyond an embarrassment -- it's harmful to everyone across the country.''

Miami-Dade's reputation for Medicare fraud in general, and excessive home care billing in particular, has deeply troubled lawmakers weighing the Obama administration's efforts to expand health coverage for millions of uninsured Americans.

Medicare's proposal to cap the agency payments for costly homebound patients could save the entitlement program for the elderly an estimated $340 million a year -- money that could help pay for other healthcare services. If adopted, the cap would take effect in January.

Bobby Lolley, executive director of the Tallahassee-based Home Care Association of Florida, said Medicare's proposal is the only way to stop the runaway fraud riddling the roughly $1.5 billion home healthcare industry in Miami-Dade.

`ROBBING THE BANK'

``They have been robbing the bank for so many years, it's time to shut them down,'' Lolley said. ``Even if some legitimate people are not served, the greater good is served by cleaning up Miami-Dade.''

There's nothing unusual about the size of Miami-Dade's diabetic population. It has a lower percentage of diabetics than Palm Beach, Pinellas and Hillsborough counties, all areas with large senior populations.

But since 2007, Medicare officials have suspected that taxpayers have been footing the bill for thousands of homebound Miami-Dade patients who receive unnecessary diabetic treatments -- either because the patient doesn't have the disease, or doesn't need a visiting nurse to inject insulin.

In an initial crackdown last October, Medicare suspended more than $100 million in payments to 10 Miami-Dade home healthcare providers with a high percentage of diabetic patients. Since then, the federal agency has suspended payments to 20 additional home healthcare operators with similar patient profiles.

Many of Miami-Dade's 450 licensed Medicare home care providers have been under intense scrutiny by federal authorities because they bill the system for an unusually high number of ``outlier'' patients, primarily diabetics. These patients purportedly require services beyond the norm, such as twice-daily visits by skilled nurses for two-month periods.

The ``outlier'' costs per patient can run as high as $15,000 every two months -- about seven times the cost for typical homebound patients, who might need bandages changed.