94 charged in Medicare scams totaling $251M

Jul 17, 2010 By KELLI KENNEDY and TOM HAYS , Associated Press Writers
Assistant Attorney General Lanny Breuer, left, speaks to the media as Loretta Lynch, center, U.S. Attorney for the Eastern District of New York, and other law enforcement officials announce charges against doctors, health care company owners, executives and others in a case of alleged false medicare billing at a news conference in the U.S. Attorney's office in the Brooklyn borough of New York, Friday, July 16, 2010. The poster at right which says in Russian "Do Not Gossip" was, allegedly, in the back room of a doctor's office where patients were being bribed for their cooperation in the scheme. (AP Photo/Robert Mecea)

(AP) -- Elderly Russian immigrants lined up to take kickbacks from the backroom of a Brooklyn clinic. Claims flooded in from Miami for HIV treatments that never occurred. One professional patient was named in nearly 4,000 false Medicare claims.

Authorities said busts carried out this week in Miami, New York City, Detroit, Houston and Baton Rouge, La., were the largest Medicare fraud takedown in history - part of a massive overhaul in the way federal officials are preventing and prosecuting the crimes.

In all, 94 people - including several doctors and nurses - were charged Friday in scams totaling $251 million. Federal authorities, while touting the operation, cautioned the cases represent only a fraction of the estimated $60 billion to $90 billion in Medicare fraud absorbed by taxpayers each year.

For the first time federal officials have the power to overhaul the system under Obama's Affordable Care Act, which gives them authority to stop paying a provider they suspect is fraudulent. Critics have complained the current process did nothing more than rubber-stamp payments to fraudulent providers.

"That world is coming to an end," Health and Human Services Secretary Kathleen Sebelius told The Associated Press after speaking at a health care fraud prevention summit in Miami. "We've got new ways to go after folks that we've never had before."

Officials said they chose Miami because it is ground zero for Medicare fraud, generating roughly $3 billion a year. Authorities indicted 33 suspects in the Miami area, accused of charging Medicare for about $140 million in various scams.

Suspects across the country were accused of billing Medicare for unnecessary equipment, physical therapy and other treatments that patients never received. In one $72 million scam at Bay Medical in Brooklyn, clinic owners submitted bogus physical therapy claims for elderly Russian immigrants.

Patients, including undercover agents, were paid $50 to $100 a visit in exchange for using their Medicare numbers and got bonuses for recruiting new patients. Wiretaps captured hundreds of kickback payments doled out in a backroom by a man who did nothing but pay patients all day, authorities said.

The so-called "kickback" room had a Soviet-era propaganda poster on the wall, showing a woman with a finger to her lips and two warnings in Russian: "Don't Gossip" and "Be on the lookout: In these days, the walls talk."

With the surveillance, the walls "had ears and they had eyes," U.S. Attorney Loretta Lynch said at a news conference in Brooklyn.

In a separate Brooklyn case, authorities charged six patients who shopped their Medicare numbers to various clinics. More than 3,744 claims were submitted on behalf of one woman alone, 82-year-old Valentina Mushinskaya, over the past six years.

At a brief appearance in federal court Friday, Mushinskaya was released on $30,000 bond and ordered not to return to the Solstice Wellness Center, scene of an alleged $2.8 million scam.

Authorities called Mushinskaya one of the clinic's "serial beneficiaries," with phony bills totaling $141,161 paid by Medicare.

Her nephew, Vladimir Olshansky, told reporters his Ukrainian-born aunt suffers from diabetes. "She doesn't know what this is about," he said. "She's in the dark."

In Miami, Daniel R. Levinson, inspector general of HHS, which oversees Medicare, said the arrests "illustrate how health care fraud schemes can replicate virally and migrate rapidly across communities."

Cleaning up Medicare fraud will be key to paying for President Barack Obama's proposed health care overhaul. Federal officials have allocated more money and manpower to fight fraud, setting up strike forces in seven cities with a plan to expand to a dozen more. So far, the operations are responsible for more than 720 indictments that collectively billed the Medicare program more than $1.6 billion.

Around the country, the schemes have morphed from the typical medical equipment scam in which clinic owners billed Medicare dozens of times for the same wheelchair. Now, officials say, Medicare fraud involves a sophisticated network of doctors, clinic owners, patients and patient recruiters.

Violent criminals and mobsters are also tapping into the scams, seeing as more lucrative than dealing drugs and having less severe criminal penalties, officials said.

For decades, Medicare operated under a system that paid providers first and investigated later. That pay and chase method was a boon for crooks, giving them 90 days lag time to milk the system and flee with millions before authorities were aware a crime had been committed.

Sebelius toured vacant storefronts in Miami on Friday where Medicare fraudsters set up shop, including bogus clinics operated by Cuban immigrants Carlos, Luis and Jose Benitez. The brothers are the agency's most-wanted fugitives, charged with bilking $119 million for costly HIV drugs that patients never received - and buying hotels, helicopters, boats and even a water park with their spoils. They allegedly fled to Cuba, where authorities believe they remain.

A new joint effort by HHS and the Department of Justice enables law enforcement to view Medicare claims in real time and flag suspicious patterns. More stringent screening methods, including more comprehensive background checks, have also been put in place. The agency gets roughly 18,000 applications daily to become a provider. Now they can put a moratorium on new applications in certain areas, like physical therapy, if they notice a spike in fraudulent activities.

The changes are paying off.

Investigators visited 1,600 providers in Miami in the past few months, making sure legitimate businesses were operating at the addresses. In 2008, authorities required all medical equipment providers in Miami to apply for new certification, hoping the paper hurdle would deter scammers. The number of claims dropped by $1.6 billion.

Explore further: 'Tis the season to overeat

4.3 /5 (6 votes)
add to favorites email to friend print save as pdf

Related Stories

U.S. officials hunt Medicare fraud

Nov 07, 2006

U.S. federal investigators are hunting incidents of Medicare fraud, using sophisticated computer technology to determine unusual patterns.

Feds ignored Medicare scam warnings for years

Nov 13, 2009

(AP) -- For three years, the federal agency in charge of preventing Medicare fraud repeatedly ignored internal watchdog warnings about swindlers stealing millions of dollars by scamming several programs, documents show.

Senior-citizen volunteers fight Medicare fraud

Dec 29, 2009

(AP) -- The first box that arrived at Shirley Shupp's door was filled with braces to help with her arthritis. Then came a motorized scooter, just like the one the 69-year-old already owned. She hadn't asked for any of it ...

Recommended for you

Pregnant woman taken off life support in Ireland

18 hours ago

A brain-dead pregnant woman was taken off life support Friday after a court ruled that her 18-week-old fetus was doomed to die—a case that exposed fear and confusion among doctors over how to apply Ireland's ...

'Tis the season to overeat

Dec 25, 2014

(HealthDay)—Overeating is common during the holidays, but there are strategies that can help you eat in moderation, an expert says.

Don't let burns mar your holidays

Dec 25, 2014

(HealthDay)—The risk of burns from fires and cooking accidents increases during the holidays, so you need to be extra cautious, an expert says.

User comments : 24

Adjust slider to filter visible comments by rank

Display comments: newest first

frajo
not rated yet Jul 17, 2010
The agency gets roughly 18,000 applications daily to become a Medicare provider.
Seems to be profitable for the applicants.
marjon
2 / 5 (4) Jul 17, 2010
I'm shocked, shocked, fraud in a government program?
Shocked.
ralph_wiggum
4 / 5 (4) Jul 17, 2010
Here's the difference, marjon. Fraud in gov't program => guilty are punished. Fraud in free market institutions => guilty get to keep their multi-million dollar bonuses and get cushy jobs and other free market institutions.
marjon
2.3 / 5 (3) Jul 17, 2010
Fraud in gov't program => guilty are punished.

When? Where in the incentive for the government to uncover fraud? It looks bad when fraud is discovered because it shows government failure. The government has no financial incentive as they will get more money from the taxpayers to cover the fraud.
When fraud is discovered in a free market, those committing fraud are out of business immediately because no one will will trade with them any more. No need for any trial. The door is certainly open to civil suits to recover the stolen money.
marjon
1 / 5 (2) Jul 17, 2010
"Jim Frogue, vice president of the private Center for Health Transformation, said it is impossible to stop Medicare fraud unless Medicare providers are screened more thoroughly. The group, founded by Newt Gingrich, former House speaker, advocates individual responsibility, technology, and greater health care availability. “The crooks are always one step ahead of the bureaucrats trying to keep up after them,’’ Frogue said."
http://www.boston...e_fraud/
ralph_wiggum
5 / 5 (3) Jul 17, 2010
A Republican Senator and the Democrat administration agree that more government oversight is needed: "Grassley wants the agency to respond to fraud warnings within two months, and Sebelius agreed. “If the department quickly responds to them, there is the opportunity to save significant taxpayer dollars,’’ Grassley said."

Does that satisfy you? Or would you rather abolish Medicare because people defraud it, dissolve the police force because crime still occurs, and dismantle the US Army because surely if we actually need an army, the magical free market will create one that's 10x more deadly and efficient?

Since I don't get paid to post political propaganda like you seem to be, I'm done with you.
John_balls
not rated yet Jul 17, 2010
Fraud in gov't program => guilty are punished.

When? Where in the incentive for the government to uncover fraud? It looks bad when fraud is discovered because it shows government failure. The government has no financial incentive as they will get more money from the taxpayers to cover the fraud.
When fraud is discovered in a free market, those committing fraud are out of business immediately because no one will will trade with them any more. No need for any trial. The door is certainly open to civil suits to recover the stolen money.


What are you talking about Ponzi schemes can go on for decades and have done so in history. Bernie maddaf a case in point.
marjon
1 / 5 (2) Jul 17, 2010
Fraud in gov't program => guilty are punished.

When? Where in the incentive for the government to uncover fraud? It looks bad when fraud is discovered because it shows government failure. The government has no financial incentive as they will get more money from the taxpayers to cover the fraud.
When fraud is discovered in a free market, those committing fraud are out of business immediately because no one will will trade with them any more. No need for any trial. The door is certainly open to civil suits to recover the stolen money.


What are you talking about Ponzi schemes can go on for decades and have done so in history. Bernie maddaf a case in point.

And Bernie was approved by the SEC.
marjon
1 / 5 (1) Jul 17, 2010
rather abolish Medicare because people defraud it, dissolve the police force because crime still occurs, and dismantle the US Army because surely if we actually need an army

The US Constitution authorizes national defense. It does not authorize national health care.
I'm done with you.

Another 'liberal' tactic when the liberal can't respond. At least you have not resorted to insults like many here.
ralph_wiggum
5 / 5 (3) Jul 17, 2010
I'm liberal-leaning but most of all I'm a realist and not an idealogue who thinks every ill in the world can be solved by one magical approach. Here, for your reading pleasure, my list of things Obama did wrong and Bush did right.

Bush right: lower taxes in response to 2000-2002 recession, foreign aid to Africa, invade Afghanistan, attempt immigration reform, authorize TARP.

Obama wrong: support of labor unions/card check bill, support of "net neutrality" and other needless FCC involvements like the broadband speed investigation, populist private sector/financial/BP bashing, failure to confront the way-too-left Dem leadership of Congress, failure to lower corporate taxes (perhaps at expense of higher individual taxes), failure to attempt serious tax reform.

Happy now?
ralph_wiggum
5 / 5 (3) Jul 17, 2010
By the way, marjon, right after "provide for common defense", the Constitution authorizes Congress to "promote the general Welfare". How do you interpret that clause, if not as services that benefit everybody like roads, education, healthcare, and so on?
John_balls
5 / 5 (1) Jul 17, 2010
I'm liberal-leaning but most of all I'm a realist and not an idealogue who thinks every ill in the world can be solved by one magical approach. Here, for your reading pleasure, my list of things Obama did wrong and Bush did right.

Bush right: lower taxes in response to 2000-2002 recession, foreign aid to Africa, invade Afghanistan, attempt immigration reform, authorize TARP.

Obama wrong: support of labor unions/card check bill, support of "net neutrality" and other needless FCC involvements like the broadband speed investigation, populist private sector/financial/BP bashing, failure to confront the way-too-left Dem leadership of Congress, failure to lower corporate taxes (perhaps at expense of higher individual taxes), failure to attempt serious tax reform.

Happy now?

How is cutting taxes when you are gearing up for 2 huge wars the RIGHT thing to do?? Sorry , I could not disagree with you more. Those wars are currently on a credit card.
John_balls
5 / 5 (2) Jul 17, 2010
Fraud in gov't program => guilty are punished.

When? Where in the incentive for the government to uncover fraud? It looks bad when fraud is discovered because it shows government failure. The government has no financial incentive as they will get more money from the taxpayers to cover the fraud.
When fraud is discovered in a free market, those committing fraud are out of business immediately because no one will will trade with them any more. No need for any trial. The door is certainly open to civil suits to recover the stolen money.


What are you talking about Ponzi schemes can go on for decades and have done so in history. Bernie maddaf a case in point.

And Bernie was approved by the SEC.


Which was part of the problem. His connections from being a free market capitalist allowed him the luxury of not being investigated due to his connections. Any average joe would of be caught within the first few years of doing this.
ralph_wiggum
5 / 5 (2) Jul 17, 2010
John_balls,
My response was to marjon who labelled my a "liberal". Thanks for pointing out that I'm hardly a mainstream liberal :)

As for 2000-2002 tax cuts, here's why they were the right thing to do... If all is well, the private sector carries the economy and the government collects taxes and pays off its debts (in theory, mind you, sadly this is sadly yet to happen in practice). If a business cycle slumps but does not crash, the government can effectively "loan" money to private sector to continue to support the economy via lower taxes (what happenned in '00-'02). If the business cycles crashes ('08-now) then government should spend the money directly because the private sector would hoard it in response to panic. Hence the current stimulus. Both Bush and Obama responded to the crises in their early presidencies correctly. Bush failed to raise the taxes back up when the economy improved. What Obama does is TBD.
marjon
1 / 5 (2) Jul 17, 2010
. If all is well, the private sector carries the economy and the government collects taxes

If all is NOT well, the private sector carries the economy because that is the ONLY place that can create wealth. Government does not create wealth. It destroys wealth.
General Welfare: "the general welfare clause is neither a statement of ends nor a substantive grant of power. It is a mere "synonym" for the enumeration of particular powers, which are limited and wholly define its content. "http://publius.ox...22/2/109
The Constitution's limited, enumerated powers create the General Welfare.
marjon
1 / 5 (3) Jul 17, 2010
By the way, marjon, right after "provide for common defense", the Constitution authorizes Congress to "promote the general Welfare". How do you interpret that clause, if not as services that benefit everybody like roads, education, healthcare, and so on?

Section 8 authorizes Congress to establish Post roads, not no universities or school or national health care system.
The 9th and 10th amendments do not allow the states to do this.
ralph_wiggum
5 / 5 (1) Jul 18, 2010
marjon, you're arguing against the Supreme Court, not against me. http://en.wikiped...d_States

"... Prior to 1936, the United States Supreme Court had imposed a narrow interpretation on the Clause ... This narrow view was later overturned in United States v. Butler ... Consequently, the Supreme Court held the power to tax and spend is an independent power and that the General Welfare Clause gives Congress power it might not derive anywhere else... Shortly after Butler, in Helvering v. Davis,[14] the Supreme Court interpreted the clause even more expansively, conferring upon Congress a plenary power to impose taxes and to spend money for the general welfare subject almost entirely to its own discretion ... Even more recently, the Court has included the power to indirectly coerce the states into adopting national standards by threatening to withhold federal funds"

Just because you don't like it doesn't mean you're right.
marjon
1 / 5 (1) Jul 18, 2010
marjon, you're arguing against the Supreme Court, not against me. http://en.wikiped...d_States

Just because you don't like it doesn't mean you're right.

Doesn't mean the Supreme Court is right. Especially now the court is more politically motivated than ever as there abortion ruling shows.
The court is slow. They finally acknowledged that the 2nd amendment is an individual right. That took 200+ years.
Also, the Constitution is amendable if the Court can't read.
The SCOTUS is similar to the science community. They uphold precedent until it is painfully obvious precedent must collapse. Only then will the court or the scientists return to first principles.
ralph_wiggum
5 / 5 (1) Jul 18, 2010
Tell you what, marjon, when the Constitution is amended to allow you to overrule the Supreme Court, then I'll listen to you over the Supreme Court. Read again: just because you don't like it doesn't mean you're right.
marjon
1 / 5 (1) Jul 18, 2010
Tell you what, marjon, when the Constitution is amended to allow you to overrule the Supreme Court, then I'll listen to you over the Supreme Court. Read again: just because you don't like it doesn't mean you're right.

Doesn't mean I am wrong.
People don't want courts to define marriage so they are amending their state constitutions to prevent courts from legislating.
SCOTUS is not infallible so why would presume they are?
marjon
1 / 5 (1) Jul 18, 2010
Ralph, do you think the SCOTUS was wrong in its Dred Scott decision?
I used to think so, but after closer examination, they made the correct decision. They interpreted the law as written not as they may have wished.
The court needs to define General Welfare in the context of when it was written not as defined by socialists today.
marjon
1 / 5 (1) Jul 18, 2010
"Ten Legal Reasons to Condemn Roe"
"Contrary to popular opinion, decisions of the U.S. Supreme Court are "often" reversed.18 Stare decisis (let the decision stand) does not prevent reversal when the constitutional interpretation of a prior ruling is later understood to be flawed. Justice Rehnquist's dissent in Casey notes that the Court "has overruled in whole or part 34 of its previous constitutional decisions" in the past 21 years. It the Court's duty to reverse wrongly decided rulings. "Justices take an oath to uphold the Constitution — not the glosses of their predecessors."19"
http://www.freere...38/posts
I am not the only one who believes the SCOTUS is fallible.
frajo
3 / 5 (1) Jul 18, 2010
The court needs to define General Welfare in the context of when it was written not as defined by socialists today.
In which context was General Welfare written? In the 1787 context of the Constitution or in the 1865 context of the Thirteenth Amendment which ended legalized slavery?
marjon
1 / 5 (1) Jul 18, 2010
"Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars." http://www.consti...ra41.htm
The Constitution was established, in part, as described in the preamble, to promote the General Welfare. Articles and Amendments then proceed to define how this will be accomplished.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.