Watchdog Report

August 4, 2008

Clinics make a mint on fake HIV treatment

The men show up on foot, on bicycles, by van or car. Before entering the sky-blue door at the rear of the vast office plaza, they carefully look around to make sure no one is watching them go in.

The men show up on foot, on bicycles, by van or car.

Before entering the sky-blue door at the rear of the vast office plaza, they carefully look around to make sure no one is watching them go in.

Behind the door, authorities say, is a Medicare racket. Manassas Medical Center in Doral has billed the taxpayer-funded insurance program for therapy that patients with HIV or AIDS haven't received.

Among the men stepping in on a June morning is Alexander McCray, who regularly stops at Manassas and dozens of Miami-Dade clinics.

McCray, a 40-year-old Opa-locka resident, admits he pockets thousands of dollars in kickbacks in exchange for giving the clinics his Medicare number to bill the agency for phony HIV infusion treatments. Manassas is among hundreds of Medicare-licensed clinics in South Florida that defraud the system with fake HIV-drug claims, according to federal claim records and authorities.

The scams are especially outrageous because HIV infusion therapy, which entails intravenous drips of medication to boost a patient's immune system, has been replaced almost everywhere but South Florida by more effective antiretroviral drugs taken orally. Yet Medicare has continued to allow the outdated HIV infusion services and to pay hundreds of millions of dollars for the treatments because the agency still considers them ``reasonable and necessary.''

That policy leaves some veteran HIV/AIDS specialists dismayed.

''There isn't any reason today to be giving any infusion therapy,'' said Dr. Margaret Fischl, who specializes in immunology at the University of Miami's School of Medicine.

Dozens of South Florida clinics -- along with others popping up in Orlando, Tampa and St. Petersburg -- are still submitting billions in Medicare claims for HIV infusion therapy, but the total bills have dropped slightly because of stepped-up criminal prosecutions of operators, physicians and billing companies during the past year, according to federal court and claims records.

Medicare, however, continues to pay these clinics hundreds of millions of dollars in reimbursements for HIV infusion therapy, according to Health and Human Services' inspector general.

And that, in turn, subsidizes kickbacks to patients, authorities said.

''Far and away, the largest number of individuals committing Medicare fraud are the patients,'' Kirk Ogrosky, deputy chief of the fraud section at the Department of Justice, said at an American Bar Association conference in Fort Lauderdale in May. ``The department must prosecute patients in order to stop the demand for kickbacks.

``If you don't stop the demand in the community by patients seeking cash, the durable medical equipment and infusion clinics are a never-ending cycle of fraud with a new one popping up every time we shut one down.''

Indeed, HIV infusion scams at local healthcare clinics are happening in plain sight, all over South Florida. And they wouldn't be able to exist without ``professional patients.''


Enter McCray, a small-time criminal with a 15-year history of drug-possession arrests, according to court records. He was last arrested in April on charges of trying to buy cocaine on Miami's streets to feed his crack habit, records show.

McCray received his Medicare disability number as an HIV-positive patient on April 26, 2001.

He has sold his Medicare ID number to private healthcare clinics in Miami-Dade for $150 to $300 a visit -- as often as three times a day, three times a week, over seven years, according to federal claim records.

The various clinics -- including Manassas Medical Center in Doral -- have filed more than $1.1 million in false Medicare claims for fabricated HIV infusion treatments in McCray's name, records show.

McCray admitted to The Miami Herald he has been abusing the system by selling his government-issued health card number to Medicare-approved clinics for years.

Normally, an HIV patient would need intravenous drug therapy such as immunoglobulin once or twice a month, but the actual number of treatments, type of drugs and precise dosages would depend on the specific condition of the patient.

The notion that a patient would need such treatments multiple times a day, multiple times a week is preposterous, according to medical experts.

What's even more remarkable about McCray's scam is that HIV-infusion therapy isn't medically necessary, thanks to the powerful antiretroviral pills.

''We hardly use infusion therapy today at all, because treatment has advanced so greatly,'' said UM's Dr. Fischl, noting that antiretroviral drugs became the ''cornerstone'' of HIV/AIDS treatment more than a decade ago. ``For 99.9 percent of the time, infusion therapy is medically unnecessary.''

But Medicare officials said they can't dictate to physicians or patients whether they should use HIV-infusion treatments or another type of therapy. Under the law, Medicare is required to approve prescribed medication that is considered ``reasonable and necessary.''

Agency officials stressed that HIV infusion therapy such as immunoglobulin is covered under Part B of the Medicare program, whereas antiretroviral drugs are not covered under that section or the relatively new Part D prescription plan. (Still, other federal dollars, through the Ryan White CARE Act, are available to low-income patients with HIV or AIDS to help pay the average $10,000-a-year cost for antiretroviral pills.)

''The law says if it's reasonable and necessary, we pay,'' said Don McLeod, a Medicare spokesman, in an e-mail.

``We want practitioners to have access to medical technologies that would benefit their individual HIV patient's situation, so it wouldn't make sense for us to do a national coverage policy that could potentially limit that access.''

Bottom line: Medicare still continues to pay South Florida clinics for multiple HIV infusion treatments, which cost from $1,500 to $3,000 per therapy, because the government program allows them -- regardless of whether the claims are legitimate, according to the FBI, Health and Human Services' Office of Inspector General and federal claim records.

On the morning of June 18, McCray was spotted by a Miami Herald reporter and photographer entering and leaving two different clinics that provide HIV infusion therapy.

Medicare records confirmed that both clinics -- Manassas Medical Center, 3900 NW 79th Ave., Doral, and ORD Medical Center, 8578 SW Eighth St., in South Miami-Dade -- billed the healthcare program for treating McCray on the morning of June 18.

Manassas Medical, located in Suite 326 in a huge office park known as the Atrium Plaza, submitted $475,000 in HIV infusion claims with Medicare for McCray and other patients from February through June, according to claim records.

ORD Medical, in a storefront office in a strip center off Calle Ocho, billed Medicare about $500,000 for HIV infusion treatments for McCray and other patients from early June to mid-July, records show.

In a brief interview, McCray said both clinics are ''not legit,'' but he declined to talk further.

Detailed billing records for McCray are unavailable because of federal healthcare privacy laws.

Manassas' owner, Pedro Antonio Colls, declined comment for this story several times.

At ORD Medical Center, a receptionist recently told The Miami Herald that the clinic was no longer providing HIV infusion treatments because Medicare recently stopped paying its claims. The owner, Osmany Rodriguez, did not return calls for comment.


Both clinics are part of Humana's Medicare network in South Florida. A spokesman confirmed that the managed care provider recently stopped paying the two Miami-Dade clinics' Medicare claims for infusion treatments.

``The reason is that the clinics were billing for [infusion]

services they were not providing to Humana members,'' said company spokesman Mitchell Lubitz.

Another man accompanying McCray to Manassas and other Medicare-licensed infusion clinics in recent months was Wendell Jackson, 55, of Miami. He received his Medicare disability number on Feb. 25, 2002, authorities said.

Since then, healthcare clinics have paid kickbacks to Jackson in exchange for using his Medicare number to bill the system for nearly $1 million in phony HIV infusion treatments, according to federal claim records and authorities.

Broward court records show Jackson was jailed in June for violating his probation on a grand-theft conviction involving stealing deep fryers from a warehouse. He violated his probation after testing positive for cocaine use and was sentenced to 18 months in prison, according to court records.

His lawyer, Dione Trawick, a Broward assistant public defender, said Jackson did not want to be interviewed for this story.

McCray, Jackson and other professional patients continue to slip through the cracks because they rotate from clinic to clinic with impunity.

The U.S. attorney's office in Miami said it has not made patients a priority because it's more interested in taking down offenders higher up in a fraudulent Medicare operation.

But as the FBI and Health and Human Services might be catching more Medicare-licensed operators and their doctors, the patients continue to sell their numbers to other scofflaw clinics that pop up.

In other instances, they steal Medicare patients' numbers. At Tamiami Medical Center in Hialeah, a habitual felony offender named Justo Padron became the president in 2006. He and his associates filed a total of 12,290 Medicare claims for immunoglobulin and other HIV infusion drugs. The total bill: $7.4 million. Medicare paid the clinic $2.4 million.

When FBI agents confronted him about more than $355,000 in Tamiami's Wachovia bank account last year, Padron said he didn't know anything about it and let them have the money.

But before prosecutors could indict Padron last November, a nine-foot alligator killed him. He had jumped into a lake as he tried to escape police after an attempted car theft in a parking lot at the Miccosukee Resort and Convention Center in West Miami-Dade.

Padron's death may have been spectacular, but the 36-year-old felon with more than a dozen Florida arrests for burglary, robbery and drug possession was a typical con artist in the underworld of Medicare fraud.


All of his clinic's claims were false, said federal prosecutors, who targeted his successor, Christian Vasquez, 25. Vasquez was sentenced in January to more than three years in prison for charging $1.1 million in fraudulent Medicare claims.

The HIV infusion schemes have multiplied so wildly that the Centers for Medicare and Medicaid Services, which manages the program, started to develop computer software in 2006 to block invalid HIV infusion bills in South Florida. But clever billing companies were still able to get around the barriers by submitting valid codes for false claims.

Despite more regulatory scrutiny -- and heightened criminal prosecutions -- the U.S. government's battle against South Florida clinics is far from over.

Not only do illegitimate infusion clinics continue to dot the medical landscape by the hundreds, authorities say there's also no shortage of professional HIV/AIDS patients -- especially in the inner city. There, brokers recruit mostly HIV-positive men to provide their Medicare numbers to scores of healthcare clinics in business sections of Miami, Doral and Hialeah, according to the FBI and court records.

Here's how the scam works:


Recruiters arrange for patients to take blood tests at the clinics, which have staff on site, to establish that they are HIV-positive or have full-blown AIDS. With that written designation, the patients can qualify for Medicare services, and the clinic operators can bill for bogus intravenous treatments.

The clinic operators make a fortune by prescribing costly HIV/AIDS drug infusions such as immuneoglobulin, billing Medicare for each bogus treatment. The patients sign paperwork saying they receive the treatments. In turn, the clinics pay the patients kickbacks, according to the FBI.

Clinic owners also pay bribes to physicians for each drug-infusion prescription.

Prosecutors cite a recent suspect, Dr. Ronald E. Harris, who was among the 90 doctors whose names appeared on prescriptions for McCray's bogus HIV intravenous therapy.


In late May, Harris and partner Enrique Gonzalez were charged with submitting about $26.2 million in fake Medicare claims for HIV/AIDS infusion services at their clinics, Physicians Med-Care of Miami, and Physicians Health Med-Care of Hallandale Beach, between August 2002 and February 2004.

Harris and Gonzalez were also charged with laundering at least $3.4 million in Medicare payments through ''sham'' investment and management companies -- including Caribbean Investments and Allstar Medical.

Harris, 57, is already in prison on a separate prescription-drug conviction, but Gonzalez, 62, is a fugitive. Authorities believe Gonzalez, along with his daughter, Carmen Gonzalez, fled to Cuba, according to court records.

The daughter faces Medicare fraud charges in a separate case.

Harris' attorney, assistant federal public defender Jan Smith, declined to comment.

While Harris has been in

prison, a medical biller at the center of a sprawling HIV drug infusion investigation snitched on him about his other alleged Medicare offenses, authorities said.

Her name: Rita Campos Ramirez, a 60-year-old high school dropout with a laptop computer on overdrive. Hers is the largest single case of fraud in Medicare history.

She electronically submitted some 140,000 bogus Medicare bills totaling $170 million for about 75 HIV infusion therapy clinics in Miami-Dade between 2002 and 2006, according to court records.

Among the worst offenders: Saint Jude Rehab Center, 330 SW 27th Ave., Miami, which was owned by the Benitez brothers, who were indicted in May but fled to Cuba, according to the FBI.

In April, Campos was sentenced to 10 years in prison and ordered to pay $105 million in restitution to Health and Human Services.


Campos, who personally received $5 million for her work on behalf of the HIV-drug clinics, had to forfeit $1.5 million in personal assets -- a Kendall home, a Miami Beach condo and a Brickell Avenue apartment, along with her 2004 Mercedes-Benz. She has helped prosecutors indict more than a dozen doctors and clinic operators during the past year.

'When federal agents interview physicians who are on the bills, they all initially give us the same answer: `I don't know anything about this.' On rare occasion, that is the truth,'' Ogrosky, the federal prosecutor, said at the ABA conference in May.

''The reality is that most doctors we talk to are involved and ultimately will get charged,'' he said.

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